How to calculate the average mortgage balance if I purchased a house on December 2024?

[QWJLEGEND]

Hello, the IRS limit for mortgage after 2017 Dec is 750K. 

I purhcased a house on 2024 December with a loan of $1,470,000, and paid ~5k in interest. The loan stays the same at the end of 2024. How should I calcuate the average mortgage balance? Is it

1). ($1,470,000 + $1,470,000) / 2 OR

2).  (0 + $1,470,000) / 2 OR

3). $1,470,000 / 12 ?

Meanwhile, I also own another house for a full year 2024, and the average mortgage balance is $450,000 ((year begin balance + year end balance) / 2). 

Apparently, it seems if I report the first house's mortgage with the average mortgage balance calculated with method or 2 above, the actual amount if interest I can deduct is less than skipping the new house's loan.

My questions:

1. Which method is correct for the average mortgage balance calculation?

2). Is it legal/permitted for me to skip the new house's loan?

Thank you! 

[KrisD15]

1. The average balance would be #1, beginning balance plus ending balance divided by two. It doesn't matter that the balance was not for 12 months. 

So in your case (1470 + 1470) /2=1470 PLUS 450 = 1,920,000 for both loans together

2. Yes, it is permitted to not claim interest you paid on a loan. If one loan has a higher interest rate than the other, claiming both could possible be less advantageous than averaging both.