In the United Sates a cash out refinance isn't fully tax deductible.
This is from IRS Publication 936 (2020), Home Mortgage Interest Deduction
To be fully deducible:
Mortgages you (or your spouse if married filing a joint return) took
out after December 15, 2017, to buy, build, or substantially improve
your home (called home acquisition debt), but only if throughout 2020
these mortgages plus any grandfathered debt totaled $750,000 or less
($375,000 or less if married filing separately).
Since the mortgage isn't to buy, build or substantially improve the house then this part applies:
Refinanced home acquisition debt.
Any secured debt you use to refinance home acquisition debt is treated
as home acquisition debt. However, the new debt will qualify as home
acquisition debt only up to the amount of the balance of the old
mortgage principal just before the refinancing. Any additional debt
not used to buy, build, or substantially improve a qualified home
isn't home acquisition debt.
So if you increase the amount of debt you will then not be able to fully deduct the interest on your taxes. Now with the 2017 tax changes few people are able to deduct the interest, but it might be part of your calculus.
I'm thinking about cashing out the mortgage while refinancing and
bring loan-to-value to 80%. (BTW, Is 80% LtV usually the maximum I can
get without compromising the rates?).
You have to check with your lenders. The cash out refinance is essentially a new mortgage. Which means that they will require Private Mortgage Insurance (PMI) if the LTV is over 80%. The PMI payment might not be deductible.
From the same IRS pub 936:
Limit on deduction. If your adjusted gross income on Form 1040
or 1040-SR, line 11, is more than $100,000 ($50,000 if your
filing status is married filing separately), the amount of your
mortgage insurance premiums that are otherwise deductible is
reduced and may be eliminated. See line 8d in the
Instructions for Schedule A (Form 1040) and complete the
Mortgage Insurance Premiums Deduction Worksheet to figure the
amount you can de- duct. If your adjusted gross income is more than
$109,000 ($54,500 if married filing separately), you cannot deduct
your mortgage insurance premiums
These numbers are for 2020, so they might be adjusted for 2021.
They also mention that the deduction is for home acquisition debt, but a cash out is a mix of acquisition debt and non-acquisition debt. So that might also limit the deduction.