An accurate answer requires a little more information so what follows is a guess based on what you've told me.
First, if you were planning on working a long time a mortgage might be a good idea. But you are only planning on working another 4 years, so the cost of putting on a mortgage will be a major factor--- and will raise the effective interest rate. That speaks against taking out a mortgage.
Second, rather than make mortgage payments you can make larger contributions to your retirement plans. That's a guaranteed reduction of taxable income.
Third, unless the new house and mortgage is fairly expensive, you may get little or not tax benefit from the deductions. Remember, the standard deduction for a couple is now $10,900. Only the amount by which your itemized deductions exceed this amount brings you any true tax savings. For those who live in no-income-tax states, getting itemized deductions to work for you is problematic unless you have a very high income.
Bottom line: pay cash for the new house, increase your 401(k) or IRA contributions.
Scott
