For your question as to what this is based on: "You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017."

From here:

https://www.irs.gov/publications/p936

But you cannot go to $750,000 each. Half of $1.4 m is only $700,000 each.