Purchasing new Primary Residence, keep current or rent? Thoughts?

[Michael Kaminski]

Currently we are looking at a new Primary residence around $700k. Current primary appraises around $625k and I owe $100k on it. We currently have one significantly cheaper rental that has been working out well and has put this idea into my head. I've got at 2.29% rate on the current primary and a mortgage payment all in of about $2600. Not many comp rentals in the area of this size to compare to but I'm expecting I can get around $3,500-3,800 in rent.

The flip side of having to take a 7% rate on the new home with only a $100,000 down is weighing heavily on me. I'd imagine the appreciation on my current house over the next few years (if I rent) will wash a lot of that interest away? What would everyone do in this situation?