I don't want to know how many people make these decisions based on gut feeling. A home savings contract sounds super great over 120 years with 2% interest – what that means no one really understands. Same with the terms... depending on the situation, it's just not optimal to fix the rate for 30 years.
There is something like an "optimal" decision only if you can precisely predict the total duration of such a loan. That means all data for the period after the interest rate expires must be fixed for a 10-year fixed interest period. Since that only exists when the repayment is sufficiently high (i.e., the loan is practically paid off), the question of the optimal solution can always only be assessed AFTER the financing.
What you can do at the time of the decision is:
a) Make an estimate of the future interest rate expectations.
We have historically low interest rates. I consider it sufficiently likely that loan conditions will rise again in the coming years.
b) Look at your own finances.
Will your income increase significantly? Is it to be expected that by the end of the short fixed interest period you will have accumulated enough capital so that the additional burden of a strong interest rate increase will be reduced to a bearable level by paying in your equity at the end of the fixed term?
c) Your own gut feeling.
Financing must also let you sleep peacefully. I am a big proponent of considering your own feeling AFTER knowing the facts. My gut usually senses when someone wants to trick me or is insincere. Therefore, I do not always choose the cheapest (monetarily cheapest) option, but the one that, balancing the facts and my gut feeling, seems to be the best solution. For that, I am a rather cautious person and definitely no gambler. Maintaining certainty and a long fixed interest period are important conditions for me so that I at least don’t have to worry about the financing.
None of us can predict the future from a crystal ball, even if some apparently think they can by operating Excel. ;) Also, every person is different—regarding experiences, knowledge, and expectations. Some are anxious, others cautious, and others run laughing into a circular saw. :)
Don’t let yourself be driven crazy and do what makes you feel good (well-informed). Don’t chase the cheapest option, but take a financing that isn’t forced onto you and that fits you. In general, I have little to no faith in financings that are to be repaid (in whole or in part) through the expiration of (newly concluded) home savings contracts and/or life insurance policies. Usually, that does not pay off at all and later breaks the neck of many a builder.
Toitoitoi, you'll manage it.