The Does have qualified for a mortgage of $500,000 to be amortized over 25 years. Their mortgage broker has offered them the following options:

1. Two consecutive 5-year terms with a fixed rate with monthly payments at an annual interest rate of prime+1% compounded monthly
2. A single 10-year fixed rate term with biweekly payments at an annual interest rate of prime+1.25% compounded annually

Prime is currently at 1.5% and projected to increase by 0.25% every year for the next 10 years. Note: the interest rate for fixed rate mortgages is set at the beginning of the term using the current prime rate and remains fixed for the duration of the term; the interest rate for variable rate mortgages is set at the beginning of each year using the current prime rate. Which Mortgage terms should they accept given that their goal is to pay as much principle as possible over the next 10 years?