You can deduct the mortgage interest paid for both houses for the entire year, even if there was some overlap for a couple of months while the first home was on the market and the new home was being readied. You can see more about deducting mortgages on two homes in this TurboTax article.
Your mortgage interest deduction may be limited if your combined Outstanding Mortgage Principal reported on Box 2 of Form 1098 averaged above $750,000 for the year. The worksheet that will calculate the deductible portion of the mortgage interest automatically is not ready yet, but the system can notify you when it will be ready by signing up here.
