Mortgage interest is the rate of interest charged on the loan you may take out to buy a house or flat. When you get a mortgage on a property, your monthly repayments will include the interest rate agreed at the point of purchase. It will be a percentage of the mortgage that was issued to you.
If you rent out a buy-to-let property and earn rental income, you used to be able to claim back a portion of your mortgage interest, and pay less tax. But from 6th April 2020, this was changed. You can now only claim a flat 20% tax credit.
There are two types of interest rates:
Unfortunately not. As of the beginning of the 2017 tax year, landlords can no longer claim their mortgage interest as an expense, so they can’t use it to reduce their tax charges. However, you will receive a tax credit of 20% of the interest.
Your agreed interest rates will be listed on your mortgage agreement that you received at the point of purchase. You can also contact your mortgage provider for more details.