Pub 936 and Turbo Tax applies what's called the Simplified method where the average balances of both mortgages are added together and subjected to a limit. If one of your loans is pre-2017 and one is post-2017, the limit will be the greater of the pre-2017 balance and $750K up to a maximum of $1M. Since your pre-2017 balance is less than $750K, your limit is $750K on the combined balance of both loans.
You are getting at what is called the Exact method. This is where you take each loan individually in the order of origination and apply it's limit. If you use this method, the limit for your pre-2017 mortgage is equal to the pre-2017 average balance up to $1M ($467,292) and all of the interest is deductible ($12,281). It's determining the limit for the post-2017 mortgage that's throwing you off. Ordinarily, the limit for the post-2017 mortgage would be $750K if that was the only mortgage you had. Now you have to reduce the $750K limit by the limit amount applied to the pre-2017 mortgage ($750,000 - $467292 = $282,708). The interest deductible on the post-2017 mortgage is $282,708 / $629,087 * $27,860 = $12,509. Adding the two together: $12,281 + $12,509 = $24,790.
Looks like your better off going with the $27K you're getting with Turbo Tax using the simplified method.
