This is the problem. I'm being asked to compare two mortgages. They're both for the same amount, split into two mortgages, but with different terms. Here's what they say:

I understand the first part; the part with the straight forward mortgage. $400K @ 4.5% for 30 years. Easy. Simple. Straight forward. But what about the second part? The part with the "interest-only" mortgage? Are they saying that this is also a 30-year mortgage, with the first 10 years being "interest-only", after which it turns into a mortgage like the $400K (where you pay principal+interest)? I think that's it. But what about the part that begins, "...but with the intent..." Are they saying that the second mortgage will be paid off in 5 years? Not 30, not 10, but 5? I'm confused. Can you guys please help?1st option (the total being borrowed is $500K):

A first mortgage of $400K @ 4.5% amortized over 30 years, with a second mortgage of $100K @ 5%, interest only for 10 years, but with the intent of paying off with equal annual lump sum payments over 5 years.

The 2nd option (the other mortgage I'm comparing the 1st one to) is set up in a similar way. If I understand what I've quoted above, I will understand this one too. Thanks.

Oh, by the way, I'm being asked to compare the two options and decide which one is the better one.

Thanks.