Last reviewed: 15 June 2026
Quick summary
- Residential buy-to-let mortgage interest is not usually deducted from rental income in the same way as ordinary running expenses.
- Keep records that separate interest, capital repayments, arrangement fees, loan purpose and any refinancing.
- Higher-rate landlords, refinanced properties and mixed-use borrowing should check the treatment before filing.
Topic hub: Landlord tax guides by property type
Direct answer
Landlords should keep mortgage records that show the interest and finance costs separately from capital repayments. GOV.UK says Income Tax relief on residential property finance costs is restricted to the basic rate of Income Tax. In practical Self Assessment terms, that means mortgage interest needs its own evidence trail rather than being mixed into general expenses. The exact rate and calculation can depend on the tax year, especially as property income tax rates are changing from 2027 to 2028.
The money model to understand
Split the mortgage into four lines. Line one is rent received. Line two is ordinary allowable expenses such as agent fees, insurance, repairs and service charges. Line three is residential finance costs: mortgage interest, certain loan fees and other affected finance costs. Line four is capital repayment, which is not the same as interest and should not be treated as a rental expense.
This is why a bank statement showing a monthly mortgage payment is not enough. A payment of £900 might include £650 interest and £250 capital repayment, or it might be interest-only. An accountant needs the mortgage statement or interest certificate to see the split. If the mortgage was refinanced or increased, they also need to know what the extra borrowing was used for.
Examples where records change the answer
- A landlord with an interest-only buy-to-let mortgage can usually evidence finance costs from the lender's annual statement.
- A repayment mortgage needs the interest element separated from capital repayment before figures go on the property pages.
- A landlord remortgages and releases cash for personal spending. The loan-purpose trail matters because not all interest may relate to the rental business.
- A landlord owns a mixed residential and commercial building. GOV.UK says reasonable apportionment may be needed where borrowing relates to different parts.
- A landlord has several properties and one mortgage facility. The accountant will need a property-by-property explanation of how borrowing was used.
What broad Section 24 guides usually miss
Competitor pages often explain that the old mortgage-interest deduction changed and that landlords now receive finance cost relief in a different way. That is useful, but many landlords still do not know what to send before the tax return is prepared.
The missing step is the record pack: annual mortgage statement, interest certificate, completion statement, arrangement-fee paperwork, remortgage paperwork and a short note explaining what each loan funded. Without that, the conversation becomes a vague debate about "claiming the mortgage" rather than a clear calculation of residential finance costs.
Records to gather before asking for help
- Annual mortgage statement or lender interest certificate for each tax year
- Monthly payment schedule showing interest versus capital repayment
- Completion statement from the purchase and any remortgage
- Arrangement fees, broker fees and lender fee paperwork
- Loan-purpose note if borrowing was increased, refinanced or used across properties
- Ownership details, including whether the property is personally owned, jointly owned or company-owned
- Rental statements, agent fees, repairs and other property income records for the same tax year
Mistakes to avoid
- Putting the whole mortgage payment down as an expense.
- Forgetting that capital repayment and interest are different.
- Ignoring remortgage cash released for personal use.
- Using one total for several properties without explaining the split.
- Assuming a landlord company follows the same Income Tax rules as a personally owned residential let.
How this affects accountant quotes
A landlord with one property, one interest-only mortgage and clean annual statements is usually easier to price than a landlord with remortgages, joint ownership, mixed-use borrowing and missing lender documents. When you ask for a quote, say whether the accountant needs to prepare the return only, rebuild old finance-cost figures, check a refinance, or advise on future ownership structure.
That distinction matters. A cheap filing quote may be fine for tidy records. A diagnostic review is more appropriate if the loan history is messy or the property was moved, refinanced or partly funded by personal borrowing.
What to write in your first accountant message
Use a short factual message: "I own a residential buy-to-let personally. The gross rent was this amount, ordinary expenses were this amount, and the mortgage statement shows this amount of interest for the tax year. I also refinanced in this month and need to know whether all the interest relates to the rental business." Attach the lender statement and completion documents rather than screenshots of monthly direct debits.
If you own more than one property, add a line for each property so the accountant can see which mortgage belongs to which rental income stream.
When to speak to an accountant
Speak to an accountant if you are a higher-rate taxpayer, have refinanced, released equity, own the property jointly, moved the property into or out of a company, or have more than one property. The finance-cost rule can change the cash-flow picture even when the rental profit looks modest.
Questions to ask an accountant
- Which mortgage costs should be treated as residential finance costs?
- What evidence proves the interest element for each tax year?
- Does my remortgage or extra borrowing need apportionment?
- Does joint ownership change the finance-cost figure on each return?
- Will MTD for Income Tax change the records I should keep from now on?
Related guides
Key takeaway
Mortgage interest is not just another landlord expense line. Keep lender evidence, interest splits and loan-purpose notes so the accountant can calculate finance-cost relief properly for the correct tax year.
Official guidance checked on 15 June 2026
FAQs
Can I claim the whole mortgage payment against rent?
No. The capital repayment part is different from interest, and residential finance costs are restricted rather than treated like ordinary running expenses.
Do I need lender statements?
Yes. Bank payments alone often do not show the interest element clearly enough for a tidy landlord tax return.
Does this apply to company landlords?
The residential finance cost restriction discussed here is for Income Tax landlords. Company-owned property can involve different Corporation Tax treatment, so check the structure.