I'm refinancing my home (to 3.0% from current 4.125%) and was planning on taking cash out to pay off my rental property (current 4.5%). I'm not sure this makes sense though, given that I deduct my rental property mortgage interest but not my home mortgage interest (I've been using the standard deduction on my return). I'll save on the overall interest I'm paying on the two houses, but I'm losing the deduction that offsets my rental income. Can anyone tell me the calculation needed to make this decision? I'm in the 22% tax bracket.
