will be considerably lower, assuming you are still in the house.

On a 400K mortgage your balance would be about $315.1K on a 10yr ARM @ 4% compared to $317.8K on a 4.25% fixed. If interest rates do rise your paying interest on a much lower balance 10 years from now...when, assuming 2% inflation...money is worth roughly 80% of what it is today. The difference in balance plus the monthly payment difference is a big difference over 120 months.

Could interest rates be higher? Sure. But they could also be lower at some point over the next 10 years giving you the chance to refi into a fixed. So you save $4000 today, $58 a month for 10 years, and have a $2600 lower mortgage balance 10 years from now. Seems like a reasonable risk to take for the savings you are getting.

10YR ARM
Loan Amt $400K
Payment: 1909.66
Balance @ 120 months: $315,135.84

30YR Fixed
Loan Amount $400K
Payment: $1967.76
Balance @ 120 Months: $317,772.94