Mortgage interest relief: what landlords can and can't claim

Mortgage interest relief for individual landlords works differently to how it used to, and differently again from how it works for limited companies — a source of ongoing confusion.

How it works for individual landlords

Rather than deducting mortgage interest fully from rental income before tax, individual landlords receive relief as a tax credit at a set rate, applied after the tax calculation rather than as a straight expense.

Why this matters for higher-rate taxpayers

This structure can mean a landlord pays tax on rental profit that, after mortgage costs, may be significantly smaller than the taxable figure — particularly for higher-rate taxpayers.

How limited companies differ

Companies holding property can generally still deduct mortgage interest as a normal business expense, which is one reason some landlords consider moving property into a company structure.

Our advice

Whether staying personal or moving to a company makes sense depends heavily on your specific mortgage costs and tax band — we run the actual numbers rather than relying on general rules of thumb.