Section 24 Mortgage Interest Relief Calculator UK 2025/26

Reviewed by Mustafa Bilgic
UK Calculator Editor · Updated May 2026

How Section 24 works step by step

Step 1: compute rental profit ignoring mortgage interest entirely. Step 2: add the profit to other taxable income to determine each pound's marginal rate. Step 3: charge income tax on the rental profit at the marginal rate. Step 4: deduct a 20% basic-rate tax reducer on mortgage interest paid. The reducer is restricted to the lowest of: 20% of interest, 20% of profit, 20% of adjusted income above PA.

The maths: a higher-rate (40%) landlord paying £6,000 of interest now gets a £1,200 credit instead of a £2,400 deduction (40% × £6,000). The annual cost is £1,200 per £6,000 of interest. Multiply by the size of the mortgage portfolio.

Carry-forward of unused interest

If the 20% × interest cap is restricted (because profit or adjusted income is too low), the unused portion of interest carries forward indefinitely. The carry-forward is recorded in Box 45 of the next year's SA105.

Carry-forward only counts against future rental profit — it cannot reduce PAYE or other income. Plan strategically when the property is heavily geared in early years.

Basic-rate landlord — Section 24 has no effect

Rent £14,000, expenses £3,000, interest £4,000, PAYE £25,000. Profit £11,000. Tax 20% × £11,000 = £2,200. Credit 20% × £4,000 = £800. Net £1,400. Pre-2017 method: profit £7,000 × 20% = £1,400. Same result — basic-rate landlords are unaffected.

Higher-rate landlord — clear cost

Rent £18,000, expenses £4,000, interest £7,000, PAYE £55,000. Profit £14,000. Tax 40% × £14,000 = £5,600. Credit £1,400. Net £4,200. Pre-2017: profit £7,000 × 40% = £2,800. Annual cost: £1,400.

Additional-rate landlord — full impact

Rent £24,000, expenses £6,000, interest £9,000, PAYE £140,000. Profit £18,000 at 45% = £8,100. Credit £1,800. Net £6,300. Pre-2017: profit £9,000 × 45% = £4,050. Annual cost: £2,250.

Common mistakes to avoid

• Believing Section 24 only affects new landlords — it applies to every let property post-April 2020.
• Trying to apply the credit before income tax — it's a tax reducer applied after.
• Counting capital repayments as interest — only the interest portion of mortgage payments qualifies.
• Ignoring the 'adjusted income above PA' cap — it kicks in for low-income high-mortgage cases.
• Forgetting that the credit cap is the lower of three measures, not just 20% of interest.

When to use this calculator

Anyone with a mortgaged residential let should run this annually. Particularly useful before remortgaging to a higher rate, or before taking on additional borrowing.

How this differs in Scotland, Wales and Northern Ireland

Section 24 applies UK-wide. Scottish landlords pay the higher Scottish income tax rates (42–48%) but only get the 20% UK-wide credit, making the squeeze worse. Welsh and NI landlords use England's bands.

When this calculator is and isn't the right tool

The Section 24 Mortgage Interest Relief Calculator UK 2025/26 above is built for the most common UK 2025/26 scenarios in this tax area. It will be the right tool when your situation maps cleanly onto the inputs — single property or simple aggregation, standard HMRC rates and bands, and individual taxpayer (rather than complex trust or partnership structures). It is informational and does not replace tailored advice from a chartered tax adviser, especially for transactions above £500,000, cross-border situations, or where reliefs interact with each other. For year-end filings, always reconcile with HMRC's own free calculators on gov.uk before pressing submit on Self Assessment.

Closely related calculators

• Landlord Tax Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Rental Income Tax 2025/26 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Property Income Tax 2025/26 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Mortgage Tax Return — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• UK Property Income Tax 2026 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.

Glossary of UK property tax terms

Section 24

The 2017 rule replacing full mortgage interest deduction with a 20% tax credit for individual residential landlords.

SA105

The Self Assessment supplementary form for UK property income.

Box 44

The SA105 box for residential property finance costs (mortgage interest).

Property allowance

£1,000 tax-free band for individual property income, claimable instead of expenses.

Rent-a-Room scheme

Separate £7,500 allowance for letting a furnished room in your main home.

Tax planning checklist

1. Confirm the figures input above match your actual position — purchase contract, mortgage offer or completion statement.
2. Cross-check the year (2025/26) — figures change every April. The tax year 2026/27 starts 6 April 2026.
3. Use HMRC's official calculator at gov.uk for the final filing figure; this calculator is informational.
4. Keep records for at least 6 years — HMRC's normal enquiry window. 21 years for fraud investigations.
5. Discuss any unusual transaction (joint purchase, gift, divorce settlement, trust) with a qualified tax adviser.
6. Submit your return online via Government Gateway — paper deadlines are earlier and penalties harsher.