take the average balance of all mortgages over the 12 months - just look for the monthly balance on your servicing statements. What I mean is for January, get the mortgage balance for each of the two mortgages, that is the January balance (add them together); same thing for each month through Oct. Then November and December use the balance on the new mortgage as part of the average
Take $750, 000/ THAT AVERAGE times the total of all mortgage interest and THAT is what you can deduct
in publication 936 it discusses taking the average mortgage balance (middle column of page 13)
