What is Section 24 actually costing you?
Mortgage interest is no longer deductible from rental income. Since April 2020 it only gives a 20% tax credit. Put in your figures to see your tax under today's rules, what it would have been under the old full-deduction rules, and the difference. A guide, not tax advice. Free, no sign-up.
A guide, not tax advice. Uses 2025/26 income tax rates and bands for England, Wales and Northern Ireland: personal allowance £12,570 (tapered above £100,000 net income), basic rate 20% to £37,700 of taxable income, higher rate 40% to £125,140, additional rate 45% above. The Section 24 credit is 20% of the lowest of your finance costs, your property profit, and your income above the personal allowance. Scottish taxpayers have different rates and bands, so the figures here will not match — the 20% credit still applies, but your main tax is worked out on the Scottish scale. This assumes an individual landlord with a profit-making let; it does not model losses carried forward, jointly-owned property splits, or company ownership. Always check GOV.UK or an accountant. Nothing you type here leaves your browser.
Interest is a 20% credit, not a deduction.
What changed. Until 2017 a landlord could deduct all of their mortgage interest from rental income before working out the tax. Section 24 of the Finance (No. 2) Act 2015 phased that out between 2017 and 2020. Since April 2020 you add the full rent to your income with no interest deducted, then get a tax reducer worth 20% of your finance costs instead.
Why basic-rate landlords are unaffected, and higher-rate ones are hit. If all your income stays within the basic rate, you were only ever getting 20% relief, so the credit gives you the same outcome. If you pay higher or additional rate, you used to get 40% or 45% relief on your interest and now get 20% — so the same loan costs you more in tax.
The credit is capped three ways. The 20% reducer is applied to the lowest of three numbers: your finance costs, your property profit, and your income above the personal allowance. So in a low-profit or loss year you may not get the full 20% back this year; any unused amount carries forward.
The personal allowance trap. Because the full rent now counts toward your total income, a let can push you over £100,000, where the personal allowance tapers away at £1 for every £2. That can make Section 24 cost far more than a flat 20% of your interest — this calculator shows when that happens.
What about incorporating? Some landlords move property into a limited company, where mortgage interest is still fully deductible against corporation tax. It can help, but it brings its own costs — stamp duty on the transfer, possible capital gains tax, company mortgage rates, and tax on taking profits out as dividends. That is a separate decision best taken with an accountant; this tool deliberately models only the personal-tax position.
Know the number, then keep it logged.
Stead's landlord tools log rent and expenses against each property, build a tax-year P&L, and track the compliance that protects your profit — gas, EICR, EPC, deposits and notices, all in one place.