How much does the mortgage interest deduction decrease if the loan amount is over $1M? This reduction seems to be at least a third based on the specifics I am seeing.

Your mortgage debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) to get the full mortgage deduction.

It is decreased as a percentage of your total mortgage interest.  

For example if your Mortgage Principle was $1,100,000 and your mortgage interest was $100,000 and your loan is before December 16, 2017, you would divide 1,000,000 by 1,100,000 which equals .909091 times your mortgage interest of $100,000 = $90,909. You would be able to deduct $90,909 of your $100,000 interest. 

If your mortgage is after December 16, 2017, it is limited to $750,000 so it would be $750,000/1,100,000=.68182 x $100,000 = $68,182.

Click here for Can I deduct my mortgage interest?

Click here for Publication 936 (2024), Home Mortgage Interest Deduction