Yes.

3.75-3.25=0.50*322,000=1,611/year extra mortgage interest, but you are trading that for $340*12=4,080 in PMI expense reduction. Plus increased cash flow of ~$3,800/year.

Seems pretty clear to me unless I f'ed up the math in my head. It's counter-intuitive, but take the higher interest rate on this one and never look back.