Deduct mortgage interest on vacation home

[Kate Christenbury]

If I do a cash-out refi on my primary home, and use the money to pay cash for a vacation home, can I deduct the entire mortgage interest? Or can I only deduct the amount that I owe on my primary home? It seems odd that if I get a new mortgage I can deduct the interest on the vacation home, but if I consolidate primary and second into a single mortgage, I can’t take the deduction. If this is the case, what’s the logic behind it?