You can use the interest rate method by calculating the Outstanding Mortgage Principal by dividing the interest paid / the lowest interest rate on that home. Take that amount and replace the amount reported in Box 2 as the Outstanding Mortgage Principal.
To use the interest rate method, you must have owned the home all year long and you paid monthly.
The average monthly balance that @ineedhelp2021 calculated above for their situation is applicable to all situations and is the one that should be used if you did not own the home for the entire year.
Rather than sum the totals, you should calculate the average outstanding mortgage principal for each loan and report that in Box 2 of their respective 1098s. Using the example above, report house 1s Box 2 amount as $109,167 and so on for the other 2 houses. Report the rest of the information as it is reported on Form 1098. If this brings your total mortgage principal below $750,000 then your mortgage interest should not be reduced.
@seattlelostpack
