[mindflayer]

unless your STRETeching to meet that 1700 payment witch is on a subprime mortgage and about to get reset to... say +2000 witch you cant make.. then i think your off.
The real question is WHAT IS Your CURRENT INCOME?

I may be TOTALLY OFF...but,

It sounds like you are trying to justify your sale by saying it is better to do it because it is "better for other reasons" rather than saying, I am on the edge and might become a statistic.
(an Interest only mortgage is typical of the subprime mortgage)

In any case, I do see both points of view.
because your m is interest only.. it is virtually the equivalent of renting.

left side of eq is
have 300k to invest, unknown return, pay 300 for rent.

right side of eq is
300k invested, 1% return,20k tax deduction,zero for rent(or 300 to invest)

I would say that 20k deduction weighs HEAVILY in your calculation. Virtually ANy type of decent salary will cause this side of the equation to be worth more.

Jimbo has ASSUMED that you have this type of job. 45k+/year
+45k salary = 9k tax savings = keep the house.
no salary = no 9k tax savings = Sell the house.
a 20-30k salary makes it a much closer calculation.
guessing a 3-4k tax savings...
What is your current income again?!?