Residential landlords · finance-cost restriction
Mortgage Interest Tax Relief Calculator
Estimate the Income Tax reduction available on residential property finance costs and the amount that may remain unused for a later tax year.
For an individual landlord, eligible interest is not deducted from residential rent when taxable profit is calculated. The relief is tested separately against finance costs, property profit, adjusted total income and the Income Tax liability.
Annual finance-cost test
Calculate the residential finance-cost tax reduction
Use your share of the annual property-business figures. Enter interest and eligible finance charges only—never the capital element of a mortgage payment.
- Property profit before finance costs
- £0.00
- Property loss used
- £0.00
- Taxable property profit
- £0.00
- Total finance costs available
- £0.00
- Property-profit limit
- £0.00
- Adjusted-income limit
- £0.00
- Income Tax capacity
- £0.00
- Finance costs used for relief
- £0.00
- Unused finance costs indicated
- £0.00
- Final estimated Income Tax
- £0.00
The result identifies which cap restricts the current-year reduction.
Direct answer
Mortgage interest relief is a tax reduction, not a rental expense deduction
The residential property profit is normally calculated before mortgage interest. Eligible finance costs then produce a reduction at the property basic rate for the selected year.
The calculation base is the lowest of available finance costs, property-business profit after brought-forward losses, adjusted total income above the Personal Allowance, and the amount that can be used without turning Income Tax into a repayment.
Why relief can be restricted
The four limits in the mortgage interest calculation
Finance costs available
Current eligible costs plus any qualifying unused amount brought forward.
Property-business profit
Profit for the year after using property losses brought forward.
Adjusted total income
Relevant income after losses and reliefs, excluding savings and dividends, above the Personal Allowance.
Income Tax liability
The reduction cannot create an Income Tax repayment on its own.
Selected-year rules
Finance-cost relief and property rates used
Official references: HMRC’s finance-cost calculation, property allowance interaction, allowable rental costs and confirmed property-rate changes.
Scope matters
When this calculator should not be used
Do not use this result for a limited company, commercial property finance costs, property dealing, mixed loans without an apportionment, or a partnership or trust without checking its specific rules.
Check before claiming
- the borrowing was used for the property business;
- interest is separated from mortgage capital;
- private use and refinancing are considered;
- property losses are reconciled to earlier returns;
- unused finance costs agree with the prior return;
- the property allowance is not claimed incompatibly.
Common questions
Mortgage interest tax relief questions
Does the restriction apply to a limited company?
No. A company’s property income and financing costs are dealt with under Corporation Tax rules, including the corporate interest restriction where relevant.
Can unused mortgage interest be carried forward?
Potentially. Where the permitted calculation base is lower than available finance costs, the unused qualifying amount may be carried forward against the same property business. The carried-forward figure should be reconciled annually.
Can I claim the property allowance as well?
The property allowance and a finance-cost reducer cannot both reduce the same year’s liability. The correct choice can depend on current and brought-forward amounts.
Why is mortgage capital excluded?
Repaying borrowed capital is not an expense of earning rental income. Only eligible interest and finance charges enter the finance-cost relief calculation.
Confidential enquiry
Need the finance-cost position reviewed?
Tell us the tax year, rental profit, current interest and any unused amount brought forward. Do not send account numbers, a UTR or bank documents through this form.