What is Remortgage?
Last verified 31 October 2026
A remortgage is replacing an existing mortgage on a property with a new mortgage, either with your current lender or a different one. Landlords often remortgage when a deal ends or to release equity.
Why it matters to landlords
For tax, the key question is what any extra borrowing is used for. HMRC's examples say interest on an increased buy-to-let mortgage may be deductible if the extra loan is wholly and exclusively for the purposes of the letting business. Interest on borrowing above the property's capital value when it entered the letting business is not deductible.
For residential lets, relief for finance costs is limited to the basic rate of Income Tax, a restriction that has applied in full since 6 April 2020, and it applies to mortgage interest, loans, overdrafts and loan fees. Only the interest part of a mortgage payment counts, not the whole payment. Keep the new loan agreement and a note of how any released money was spent, because you will need to split the interest between letting and other uses.
Example
Pat's let flat has a £100,000 mortgage. He remortgages to £120,000 and spends the extra £20,000 on his own home. Interest on that extra £20,000 is not a letting cost, so he should apportion the interest and claim only the part that relates to the letting.