5 Year vs 10 Year Mortgage Terms

 Decisions, decisions.            

Choosing the 5 Year term at 2.89% is very tempting but I am telling my clients to take a good look at the 10 year term available at 3.69%.
My concern is what the rates will be in 5 years. A quick survey of my peers and lenders comes up with 4.75% to 5% as a probable rate.
A 5 year 2.89% 25 year am. mortgage carries for $1286. per month.
A 10 year 3.69% mortgage carries for $1401. per month. $115. more per month.

If you take the 5 year and come up for renewal with a balance of $234.557 and renew for another 5 years at our estimated rate of 5%,  you will pay $1541 a month. Choosing this scenario you will pay $90,205 in interest vs $86,859. in interest taking a 10 year term. Even the balance at the end of a 10 year term is $1796. less taking the 10 year term. These results will be even more amplified if you take accelerated Biweekly payments.
With the 10 year term you get rate security and savings.