Assuming that the down payment is $175,000 x 30% = $52,500, the loan amount is $175,000 - $52,500 = $122,500.
For Loan #1, the interest rate is 7.25%, and the loan term is 20 years. Using a mortgage calculator, the monthly payment would be $912.52, and the total interest paid over the life of the loan would be $119,005.24.
For Loan #2, the interest rate is 7.00%, and the loan term is 25 years. Using a mortgage calculator, the monthly payment would be $832.05, and the total interest paid over the life of the loan would be $139,614.68.
Comparing the two loans, Loan #2 has a lower interest rate and a longer loan term, which results in a lower monthly payment but a higher total interest paid over the life of the loan. Loan #1 has a higher interest rate and a shorter loan term, which results in a higher monthly payment but a lower total interest paid over the life of the loan.
In the end, the choice between the two loans depends on the individual's financial situation and priorities. If the individual values a lower total interest paid over the life of the loan and can afford a higher monthly payment, then Loan #1 may be the better option. If the individual values a lower monthly payment and is willing to pay more in total interest over the life of the loan, then Loan #2 may be the better option.