Mortgage interest deduction - how to determine principal

Hello,

 

I have a mortgage over $750,000.  I understand that you can only deduct the interest up to $750,000, but how do you calculate the principal to use in the calculation?  Do you use the loan amount as of Jan 1?  Dec 1?  Or an average?  For example, your loan may have a balance of $900,000 on Jan 1 and $880,000 on Dec 1.  What value do you use when calculating the percentage of interest to deduct - 750,000/900,000 or 750,000/880,000?

 

Thanks