Stay in the house! If you can afford it don’t worry about how much cheaper renting would be. Ask yourself how happy you would be if the sheriff shows up to the door to kick you out because your landlord hasn’t been making his payments! That has happened to many renters and it will continue to happen. Your monthly payment after the tax writeoff is not that much more expensive than equivalent rent, and you own the place. Someday it will be paid for. Also, don’t forget all of the costs associated with buying and selling a home. If you sell you’ll be out money and when you buy again you’ll be out money, too. Those realtors gotta make their BMW payments, you know.

As for the house being “too small”, my grandmother raised 4 kids in 1100sf. It’s the family that’s important, not the house.