Landlords used to be able to deduct mortgage interest repayments and allowable expenses from their rental income, but this has been gradually phased out. Since 2020 the new tax rules have been firmly in place. That means landlords are now taxed on their total annual income (including income from any other employment) and can only claim tax relief at the basic rate of 20% on whichever figure is lower: – Finance costs (inc mortgage interest payments, loan repayments, overdrafts); – Profit from rental income (minus allowable expenses); – Total income (anything other than savings and dividend income above the personal allowance after deducting losses and tax relief). So, if you were claiming your interest-only mortgage as an expense prior to 2020, you’re now not able to do this. You can just claim a 20% relief on the lowest of the above instead. For most landlords, this will be the finance costs. Some landlords might find they’re pulled into a higher tax bracket because of these changes – something to watch out for.