1 is okay but actually a little more refined - see below. there are other methods that can be used but I don't know if Turbotax can do those calculations
see IRS PUB 936 starting on page 10
https://www.irs.gov/pub/irs-pdf/p936.pdf
mortgage interest paid times $750,000 divided by the sum of the average balance of the two mortgages.
so if you paid off $100,000 on the first and none on the second the average balance, under one method, of the first would be $450,000 added to the $400,000 average balance of the second.
if you ever refinanced the mortgage on the first home that will complicate matters.
