Which to choose? 70% LTV @ 3.25 or 80% LTV @ 4.5 or 5

[Ali Horbach]

 Curious what you all would do. In contract on a duplex investment property. (it is too close in proximity to primary  to ever qualify for a 2nd home and is currently rented) Here are the financing options, all 30 year fixed. 

1. 30% down at 3.25 % no points

2. 20 % down @ 4.5% ; 5 yr prepay; 2 points

3. 20% down 5% 2 points  

The Cash on Cash is very similar @ 11%  for option 1 and 10% for option 2. As well as equity payback period @ 9 yrs for option 1 and 9.42 for option 2. It is a difference of $20,880 over 5 years (length of projected hold time) in interest or an extra 34,500 out of pocket now. My gut tells me that I can do better by reinvesting the $34,500 into another property and taking the lower down payment option but what if we end up holding the property past 5 years. Also what are feelings on a 5 yr prepayment penalty? being as I underwrote the deal as a 5 yr hold it didn't concern me terribly but it would mean not being able to refi any cash out. Option 3 is slightly higher interest rate but we could refi the property in under 5 years. Both leases expire this year and are under market so there is growth in the property. 

Thanks for reading! Love to hear all of your thoughts!