A small multifamily rental property is being acquired for \($1.5\) million at 65% Loan-to-Value. The current products offered are a CPM note for 5.85% annual interest over a 30-year term and a variable rate loan that has a five-year initial interest rate of 5.25% before it is adjusted. Based upon numerous economic indicators, you believe the rates to stay low. You anticipate that every five years the interest rate will increase by 25 basis points. Assuming this holds true, which rate is cheaper for the borrower if the loan is held until maturity?

a Fixed rate b Variable rate