Landlord mortgage interest tax calculator (Section 24)

See how much tax you'll pay on your rental income now that mortgage interest only gets 20% tax relief, and how much more that costs you than the old rules.

Work out the tax on your rental income

The short answer

Individual landlords can't deduct mortgage interest from rental income. Instead, you get a tax credit of 20% of the interest.
Basic rate taxpayers usually pay about the same as before. Higher rate taxpayers pay more, because they only get 20% relief on interest that used to save them 40%.
Adding the full rent to your income can also push you into a higher tax band, or affect Child Benefit.

An estimate for individual landlords in England, Wales and Northern Ireland using 2026/27 Income Tax rates. Doesn't apply to limited companies or furnished holiday lets, and doesn't include Scottish rates, savings or dividend income. Assumes tax on your other income is paid through PAYE. Not tax advice.

How Section 24 works

Your rental profit is the rent minus running costs, without taking off mortgage interest.
That profit is added to your other income and taxed at your normal rates.
You then get a 20% tax credit on the lowest of: your finance costs, your rental profit, or your total income above the personal allowance.
Any finance costs you couldn't get relief on carry forward to next year.

Frequently asked questions

What counts as a finance cost?

Mortgage interest, interest on loans to buy furnishings, and fees for arranging or repaying a mortgage. Capital repayments don't count.

Does Section 24 apply to limited companies?

No. Companies can still deduct mortgage interest in full. That's one reason some landlords use a company, but moving existing properties into one can trigger Stamp Duty and Capital Gains Tax, so get advice first.

Can I make a loss because of my mortgage?

Not in the old way. Because interest isn't deducted, your rental profit can be positive even if you're losing money after the mortgage. That's why some landlords pay tax while out of pocket.

When do I pay this tax?

Through Self Assessment, by 31 January after the tax year ends. From April 2026, landlords with qualifying income over £50,000 also need to follow Making Tax Digital. Check if MTD applies to you.

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