A bigger mortgage interest deduction does not put you ahead, because you had to spend the extra interest to get it. Run the math on an illustrative $500,000 mortgage. At around 3% you would pay roughly $15,000 in deductible interest the first year. At around 5%, roughly $25,000. That is about $10,000 more in deductible interest. To get that extra $10,000 deduction, you actually paid $10,000 more in interest. A deduction only returns your marginal tax rate on the amount, roughly 35% to 45% depending on your bracket and state. So you spent $10,000 to get back maybe $3,500 to $4,500, and you are out the difference in real, spendable cash. We have had clients say they would happily take a higher rate for the larger write-off, and we understand the appeal. But a deduction softens a cost. You are always better off paying less interest, even if the deduction shrinks with it. Confirm the specifics with a tax professional, since deduction rules and limits depend on your situation. The underlying logic holds either way: chasing a deduction by paying more interest leaves you behind on cash flow.