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It's not variable, it's fixed at 3.5% for 30 years. A "jumbo" loan has a higher interest rate than a conventional simply because of its high initial principal, making it a riskier proposition for the bank. What calculator are you using to calculate principal vs interest for a fixed rate loan? Remember, the lower the fixed interest rate, the higher % of principal you are paying at day 0.

The economics of buying vs renting has changed a great deal since I moved here. 5 years ago, buying was rather questionable. I took advantage of "cheap" rents to save up for buying a house when it finally became a buyer's market. Now rents have nearly doubled, but housing prices haven't gone up proportionately.