Mortgage Interest Deduction with Multiple Mortgages

[jdlr1025]

Hello.  I have two mortgages on two different homes, my primary home and a second home.  The primary home mortgage was originally taken out in 8/2017 ($990K all to purchase the home), and I refinanced it with a cash out in 2021 ($1.08 million, $940K remaining from the original home purchase). The second home mortgage was taken out in 2020 ($663K all to purchase the home).  Can I deduct the mortgage interest from both homes? My concern is the $750K cap that was enacted at the end of 2017.  Does the $750K cap apply to each mortgage separately, or does the $750K cap apply to the combined amount of the mortgages?  Thank you.

[Vanessa A · Accepted solution]

 The cap applies to your mortgages combined.  Also, the interest on the cash out amount is not deductible. Only the interest on the amount used to buy, build or improve the home is tax deductible.