to the extent the refi was equal to or less than the principal outstanding at the time of the refi, the interest is deductible (assuming your mortgages on a first and second home don't exceed $750,000) but points have to be amortized over the life of the mortgage. if you refi'd more than the amount outstanding and used it for personal purposes, none of the interest or points relating to that portion are deductible or amortizable. if you took out more than the original and used it for improvements to your first or second home, then the interest and points are deductible (again subject to the rule which sets a maximum on mortgages.
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