UK Mortgage Interest Tax Relief Calculator
Primary residences: no mortgage interest relief since April 2020. Buy-to-let landlords: calculate your 20% basic-rate tax credit on finance costs. Free.
No mortgage interest deduction for primary residences in United Kingdom
Switch to Buy-to-Let above to calculate the 20% basic-rate tax credit for landlords.
- •Primary residence: Mortgage Interest Relief was fully abolished for homeowners from April 2020. No deduction or credit applies to a home you live in.
- •Buy-to-let landlords: since April 2020, finance costs (including mortgage interest) are no longer deducted from rental income. Instead, landlords receive a 20% basic-rate tax credit on finance costs.
- •The 20% BTL credit is fixed regardless of your income tax bracket — higher-rate (40%) and additional-rate (45%) taxpayers receive significantly less benefit than pre-2017.
- •Limited companies: mortgage interest remains fully deductible as a business expense for BTL properties held in a limited company.
UK Mortgage Interest Relief — Abolished for Homeowners
Mortgage Interest Relief At Source (MIRAS) was gradually abolished in the UK, with the final removal of all primary residence mortgage interest relief completed in April 2020. If you live in the home you own, no tax relief is available on your mortgage interest payments.
This change was introduced in Budget 2015 and phased in between 2017–2020 as part of a broader effort to cool the buy-to-let market and level the playing field with owner-occupiers.
Buy-to-Let: 20% Basic Rate Tax Credit
Landlords with buy-to-let mortgages no longer deduct finance costs from rental income directly. Instead, since April 2020, they receive a 20% basic-rate tax credit on all mortgage finance costs (Section 24, Finance Act 2015).
- Basic-rate (20%) taxpayers: broadly unchanged — credit equals the old deduction
- Higher-rate (40%) taxpayers: significantly worse — previously saved 40p per £1 of interest; now save only 20p
- Additional-rate (45%) taxpayers: the worst affected — 20% credit vs. prior 45% deduction
Limited Company Exception
Buy-to-let properties held in a limited company are not affected by Section 24. Mortgage interest remains fully deductible as a business expense. This has led many higher-rate taxpayer landlords to incorporate their portfolios — though incorporation itself can trigger Stamp Duty Land Tax and Capital Gains Tax charges.
Frequently Asked Questions
Are there any reliefs left for homeowners?
Not on mortgage interest. However, the main residence Capital Gains Tax exemption (no CGT on gains from selling your primary home) remains and is very valuable.
Is BeastyTax free?
Yes, completely free — no account, no hidden costs.