Section 24 mortgage interest calculator
See how much more tax you pay because mortgage interest gets a basic-rate credit instead of a full deduction.
Key facts
- Since 2020/21, individual landlords can't deduct residential mortgage interest. They get a tax credit at the basic rate instead.
- The credit is 20% in 2026/27 and 24% from 2027/28.
- Higher-rate landlords lose about 20p for every £1 of interest compared with a full deduction.
- Limited companies aren't affected. They deduct interest as a business cost.
What the result means
Before 2017, a landlord with £20,000 of rent and £10,000 of interest paid tax on £10,000. Now tax is charged on the full profit before interest, and a credit at the basic rate is taken off. A higher-rate landlord pays 40% on the interest and gets 20% back. From April 2027 it's 44% against 24%, still a 20-point gap. For additional-rate landlords the gap stays at 25 points.
The threshold traps
Adding interest back to your income can push you over £50,270 (higher rate) or £60,000 (High Income Child Benefit Charge). Above £100,000, every £2 of extra income removes £1 of Personal Allowance, an effective rate of 60% or more. That can also affect tax-free childcare. See Section 24 explained.
Assumptions
Individual landlord, residential property, England, Wales or Northern Ireland. "If interest were deductible" is shown for comparison only. It isn't an option open to individual landlords.
Frequently asked questions
What is Section 24?
Section 24 of the Finance (No. 2) Act 2015 stopped individual landlords from deducting residential mortgage interest. It was phased in from 2017 and fully applies from 2020/21. A basic-rate tax credit replaces it.
Does Section 24 affect basic-rate taxpayers?
Usually only a little. If all your income stays in the basic band, the credit gives about the same result as a deduction. Your taxable profit is higher, though, so it can push you into the higher band.
What if my interest is more than my profit?
The credit is limited to the lowest of your finance costs, your property profit and your income above the Personal Allowance. Unused costs carry forward.
Sources
- GOV.UK: Tax relief for residential landlords, how it's worked out
- GOV.UK: Income Tax rates and allowances, current and past
- GOV.UK: High Income Child Benefit Charge
Sources last checked 9 November 2026. See all our sources and how we keep pages up to date.