How is mortgage interest deduction calculated? example: primary home loan 1M, 40K paid in interest all year. Secondary home loan 1M, only $500 paid in interest for the yr

Turbotax adds the loans when calculating the deductible amount and this does not seem right:
(40,000 500)*(750K/2M)
The tool gives both loans the same weight as if they both existed all year, but in my example the second loan was obtained in the last days of the tax year and paid only $500 in interest.