Yes, the amount of interest on the original mortgage will continue to be deductible on schedule A. If the original mortgage was originated before December 2017, you will use the $1M deduction limit on this portion of the refinance if you use Turbo Tax (and probably any other tax software) to do your taxes because of the cash out. The interest on the amount of the cash out used to purchase a rental property will be deductible on schedule E as a rental expense.