Refinancing the loans can effect the calculation of the mortgage limit because the new loan is now a post 2017 loan with the $750K limit. However, in your case the bottom line comes out the same because the balance is less than $750K. You are limited to $750K of the total of averages of both mortgage balances. If the numbers you provided were the average balances, this would work out to $750K/($235K + $625K) = 0.872 (87.2%). So you can deduct 87.2% of the total interest you paid on the mortgages.
Turbo Tax has had many problems calculating the mortgage interest deduction for complicated mortgage situations especially situations involving multiple refinances with non-acquisition interest for years now. In order to do it correctly, Turbo Tax would have to depend significantly on the user to either calculate the deduction themselves according to Pub 936 or enter lots of detailed information.
