A 5 year time frame is short term, not long term. Yes, long term you can average 7% in the market... but short term, who knows? I'd go with the 15-year @ 3.25% and have more equity to roll over into buying your next home. The market could verrrrry easily down turn over the next few years and not only would you be paying more in interest on your home, but your investments could go also down. For a short term 5 year window... take the sure bet, that's my opinion.