If the mortgage was Dec 14 '17 or before the $750K limit doesn't apply as you are grandfathered to $1MM or less. Relevant for me since in my case I have pre-'17 mortgage debt of $830K at start of year. If I change the principal to $1 through about $550K I get the same tax owed, held constant. As I increase the principal the amount owed goes up. This despite not changing the interest paid for the year. And, curiously, as one other weird edge case, if I change it to $0, the tax owed goes through the roof.
It makes no sense that changing the principal balance on this mortgage should change the amount of tax owed. It doesn't seem like a relevant factor.
