The rules for obtaining a tax deduction for interest paid against your rental income are fairly flexible. It doesn’t matter if the interest is paid on a personal loan, a mortgage, or even an overdraft, as long as the borrowing was made to fund the letting business in some way.

If you extend the mortgage on your own home to release funds to buy or repair a let property, you can set-off the interest on the extended portion of the mortgage against the rents received from the let property. Detailed records of all borrowings should be maintained to support loan interest claims in the case of an enquiry by the taxman.