A method and system for selecting a preferred debt instrument (e.g., mortgage) for an individual consumer, where the option adjusted spreads (OAS) and risk measures of a plurality of debt instruments are determined and ranked using standard bond valuation methodology. A typical scenario involves a consumer inputting a plurality of mortgages and associated features (e.g., term of loan or type of interest rate) and receiving the option adjusted spread and risk measure for each mortgage, from which the consumer may select the appropriate mortgage having the lowest option adjusted spread within his or her risk tolerance. These steps can be implemented by a computer which includes a central processing unit (CPU) and a computer code operatively associated with the CPU. The relative option adjusted spreads and risk measures of various debt instruments can be displayed on a visual display or used to automatically commence the financing of a mortgage.