Comparing mortgage options

Comparing mortgage options

I am under contract for my first house and I am trying to decide between 2 mortgage options.

Selling price is $290k. Both options are with same downpayment and closing costs:

Option 1: -$15k downpayment assistance 30 year fixed mortgage -2nd interest free downpayment loan is given for “free” unless house is sold/ refinanced before 10 years of ownership -APR: 7.20% -payment including property tax, PMI, home insurance etc is $2180

Option 2: -5 year ARM through local credit union -Up to 100% LTV -Fixed APR of 6.125% for first 5 years, subject to change after 5 years -No PMI required -payment including property tax, home insurance etc: $2045

Option 2 is $135 cheaper per month due to lower interest rate and no PMI, but that could change after 5 years.

I’m not sure how long I am planning to keep the home and am unsure how interest rates will be after the 5 years are up on the ARM