Your calculations look fine. The average balance for the mortgage on your principal residence would be the balance per Form 1098 plus the balance as of 1/1/2023 (the next year) divided by two.
The mortgage on the second home was held for about six months (July - December). Your best option for this loan is to total the mortgage balances for each month, then divide by six. This average is likely to be the same as (or close to) the average using first + last x months/12. You can try it both ways and use the lower of the two answers.
To calculate the percentage of mortgage interest you can deduct, divide $750,000 by the total of your two average balances. Multiply this percentage by the total interest you paid to calculate your deductible mortgage interest.
Because you incurred debt after 2017, your qualified loan limit is $750,000. Unfortunately, the IRS rules do not allow you to calculate deductible interest for each loan separately, even though they fall under different mortgage limits.
@Marka81
[edited 4/4/2023 | 1:12 pm to correct instructions for partial year loan]
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