It appears that Turbo Tax is not aware that the first mortgage was paid off in 2023. When entering the 1098 data for the first mortgage, select the 'This loan was paid off or refinanced in 2023' box on the 'Tell us about this loan' screen. After entering both 1098's and selecting 'Done', you should be prompted to enter more payoff info. You will then get a chance to enter your own values if you disagree with Turbo Tax calculations. At least this is what I get using the desktop turbo tax.
In previous years, Turbo Tax calculated average balances differently than called out in Pub 936 resulting in a larger deduction in my case. I suspect it is the same this year so don't expect its result to match exactly with yours.
