Well, it all comes down to what you really want. You start out by saying you're trying to lower your payment, but then you point out that you could pay off the debt much faster if you don't lower the payment. Which is the priority: the cash flow, or the faster payoff?
For me, the 0.5% savings pales in comparison to the investment potential of $184 monthly. If you invest the difference, your investment return only needs to match your mortgage rate for it to be a break-even deal. If your ROI is higher than the loan APR, you could pay off the remaining balance after the same 21-year period, AND still have leftover investments paying dividends. If, on the other hand, you suspect your anti-MMM DW would squander the extra cash on increased spending, then you might apply the "forced savings" theory and lock that equity away for a rainy day... by which time, hopefully, you two will have come to common ground on what is and isn't a good use of funds.
Another way to look at it: option 3 saves you $54k over 21 years. By comparison, $184 invested monthly for 21 years at 7% gives you about $99K... IF you invest it. :)
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