We recently did 5/1 ARM no cost refinancing. 2.875%. Lifetime CAP is 7.785 % (still not bad). Your payment will be almost the same or less even after taking out 50k. Plus paying less interest.

I would refinance, take 5/1 if you planning to leave in 1-3 years, and get a bit higher % to cover closing costs with lenders credit.
Yes, you'll be paying mostly interest again, but $$ of that interest every month will be lower than $$ of interest you're paying now, so no brainier here.

I would be grateful for advice from someone better at financing than I am. Our mortgage is at 5% - too high, I know, but we plan to move in 1-3 years for better schools (so some pressure to do it). We need some cash out now to cover some debt and to do some maintenance on the house - planning to take about 50K out. Do we take a HELOC (no fees), or do we refinance (plus closing costs)? If we refinance, is it crazy to do a 5/1 ARM? If we reset to a 30-year mortgage, we'd be paying mostly interest again. House is worth about $675,000 and the balance on our mortgage is about $440,000. TIA!