Graeme is purchasing a home for $200,000 and has a 25% down payment. The seller has an existing mortgage on the property which is assumable with a balance of $90,000 and an attractive rate of 3.75% for the next 5 years. He has the following options: 1. Take out a single mortgage for the full required amount at a rate of 4.25%. 2. Assume the $90,000 mortgage and take out a 2nd mortgage for the difference at a rate of 4.75%. What option will result in the best overall rate?