The 5 yr ARM is a principal and intrest payment, not an optional interest only.

Here’s what has me frazled, my mortgage guy says nobody has ever asked for the info that I’m asking for.

Here’s his synopsis of the charts that I had him pull for me comparing both loans.

“Check the two attached spread sheets. I am still working on how to figure out what happens when the ARM were to go to 7.50% after 5 yrs. Nonetheless this shows after 5yrs, in addition to the monthly savings, your loan balance will be about 13k lower further kicking out that breakeven. Safe to say it’s around 9.5 yrs at this point.
 
The chart shows all 360 payment so just look at payment #60 for 5 yr analysis.”

So, I would have saved $28,000 in payments in the first 5 years AND my principal would be $13,000 less by taking the lower 2.5% loan. That’s a freaking boat load of money.

$41,000 is more than the average yearly take home pay in San Diego after taxes!