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John is interested in a new house

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John is interested in a new house. The price house is $1,150,000.The bank provides either 3-year fixed at 1.63% or 5-year variable at P-0.85. Either way, John would like to make a 25% down payment on a 30-year mortgage and make monthly payments.
the current prime rate is 2.45% and the 5-year variable rate at P-0.85. But John worries about possible inflation in the future. You want to help John to find out the best solution.
Since the highly uncertainty of the future interest rate, you don't have enough confidence on the forecast of the future interest rate. So, you decide to build an Excel model to compare the two choices with interest rate allowed to change semi-annually. John can play around with your model with his own interest rate expectations and make decision accordingly.
Knowns for your Excel model,
·       The property value is $1,150,000 and John will make a 25% down payment.
·       The mortgage starts on Sept 1, 2020 with a 30-year life and the payment frequency is monthly.
·       Interest rate can be changed semi-annually. All calculation will be automatically updated when the interest rate changes.


What you can't decide yet, are the following:


1) What statistics should your model calculate to compare the two choices?
2) What is the best way to compare two mortgages with different terms?
3) Is there a point in which John could be indifferent between the two choices? If yes, what would it be? Using Excel to do the question.