If you can reliably trace the cash out from the refi to the purchase of the rental property then the interest is business interest reportable on Schedule E, and has been all along. Depending on the circumstances you may have been over reporting Schedule A interest.
You might want to go back and amend previous years to see the results, though only the last 3 years are open to amending if you are claiming a refund.
Schedule E is the appropriate place to claim the interest. Whether changing from prior years' practices in 2017 will draw the attention of the IRS I can't say, but the change will more correctly reflect the rental's income or loss.
Tom Young
