See how the mortgage-interest restriction affects the tax on your rental profit.
Since the Section 24 phase-in completed, mortgage interest is no longer deducted from rental profit - instead you get a 20% basic-rate tax credit. Estimate only; rates from 2026/27.
Tax on rental profit
on taxable rental profit
effective tax rate on profit
profit kept after tax
Section 24 costs you
You pay more tax a year than under the old interest-deduction rules - your 20% credit is capped because your profit is lower than your interest.
At your figures the restriction doesn't increase your tax - you're a basic-rate taxpayer, so the 20% credit fully offsets the interest.
Estimate only. Ignores allowances/reliefs beyond those shown and assumes the property is held personally.
Keeping your other figures fixed, how tax changes from £0 up to roughly double your current interest.
| Scenario | Profit | Tax (S24) | Extra tax | |
|---|---|---|---|---|
Next steps
Income tax
Tax on all your income
Stamp duty
Tax on a property purchase
Mortgage calculator
Repayments & interest
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