Maximising mortgage interest tax relief for landlords


As landlords continue to get to grips with the rollout of mortgage tax relief changes as a result of new Section 24 tax rules, some lenders are offering a helping hand to minimise the effects.

Up until recently, landlords have had a major tax advantage, only having to declare rental income after their buy-to-let mortgage has been paid. Since April 2017, the way rental income is declared has changed, resulting in significant tax implications for landlords. The outlook for landlords’ tax bills has been gloomy, but one building society has introduced a new product that offers some short-term respite.

Mortgage interest tax relief is set to reduce each year until April 2020; this year landlords will be able to claim 50% of their mortgage tax relief. In the 2019/20 financial year, this will reduce to 25%, before the introduction of the new tax credit in April 2020 when they will no longer be able to deduct any mortgage expenses from rental income.

Maximising tax relief for 2018/19

Leeds Building Society has launched a new mortgage product specifically designed to help landlords maximise their tax relief this year. Buy-to-let mortgages with inflated fees to compensate for lower rates have been added to their product portfolio; two-year fixed-rate mortgages with a £2,499 upfront fee, with rates of 1.44% at 60% loan to value (LTV) and 1.69% at 70% LTV. Both products come with free standard valuation and fees assisted legal service.

Leeds Building Society’s director of product and distribution, Jaedon Green, said: “The underlying economics of buy-to-let are changing as the government’s tax changes start to bite. Fixed rate products continue to look attractive, offering certainty over funding costs, but the gradual introduction of the tax changes and tapering off of tax relief potentially creates opportunities. The society has recently strengthened its dedicated buy-to-let mortgage underwriting team to further enhance the application process, as well as simplifying its criteria for this form of lending.”

Short-term respite

These deals are designed specifically to minimise the interest payable next year. According to the lender, these fixed-rate products will enable landlords to front-load funding costs and maximise mortgage interest tax relief. Whilst this is only a short-term benefit, it does offer landlords some breathing space to review their long-term financial plans.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

HMRC tax

Maximising mortgage interest tax relief for landlords


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.