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A borrower got a mortgage loan 5 years ago for $ 4 1 0 , 0 0 0 at 6 % interest for 3 0

A borrower got a mortgage loan 5 years ago for $410,000 at 6% interest for 30 years with no prepayment penalties or closing costs. The borrower just got a call from her friendly mortgage broker suggesting she refinance into an 7/1 ARM (indexed to one-year Treasury yields with an 8% margin). The 7/1 ARM has a 30-year amortization. The 7/1 ARM has teaser rate of 5%, a fully adjusted rate of 9%, and closing costs of $10,000.
The borrower plans to move to San Antonio, TX when she retires in 6 years. When she moves she must payoff all outstanding mortgages. Should she do the refinance -- use the IRR & NPV (assume the discount rate or opportunity cost of capital of 5%) criteria to make the decision?

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