How interest-only mortgage payments are worked out
The formula, monthly payments for common loan sizes, the comparison with repayment, and the savings needed to clear the loan.
The Chancellor set out the Autumn Budget on 28 October 2026. If you only read the headlines, not much moved: the tax on wages, employer National Insurance, Corporation Tax and Capital Gains Tax all stay where they are. The real changes are aimed at particular kinds of income, and nearly all of them start in 2027. That leaves time to work out what they mean for you before they bite.
This guide runs through what stayed the same, what changes, who it affects and the dates to put in the diary.
What stays the same
| What | Position after the Budget |
|---|---|
| Personal Allowance and basic rate limit | Frozen until 5 April 2031, with the matching National Insurance thresholds |
| Dividend tax | 10.75% / 35.75% / 39.35% |
| Corporation Tax | 25% main rate, 19% small profits rate |
| Employer National Insurance | 15% |
| Capital Gains Tax | 18% and 24% |
The frozen thresholds are worth a second look. Your tax-free amount stays at £12,570 and the higher rate still starts at £50,270, so any pay rise between now and 2031 pulls more of your income into tax. The rate on your wages does not change, but the share of your pay that gets taxed creeps higher each year. Our take-home pay calculator shows where your own salary sits against those bands.
What changes
Tax on rental and savings income goes up from 6 April 2027
From the 2027/28 tax year, income from property and income from savings get their own, higher rates instead of the normal income tax rates.
| Band | Rate now | From 6 April 2027 |
|---|---|---|
| Basic rate | 20% | 24% |
| Higher rate | 40% | 44% |
| Additional rate | 45% | 49% |
The savings rates apply across the UK. The property rates apply in England, Wales and Northern Ireland, and Scotland and Wales can set their own.
Who it affects: landlords with rental profit, and savers whose interest goes over their tax-free allowances. As a simple example, take someone earning £35,000 with £3,000 of savings interest a year. The first £1,000 is covered by their Personal Savings Allowance, which leaves £2,000 taxed. Today that costs £400 at 20%. At 24% it becomes £480, assuming the allowance itself stays as it is.
Use the savings interest tax calculator to see how much of your interest is taxed now, and the landlord tax calculator for rental profit.
Cash ISAs keep the full £20,000 limit
The cut to the cash ISA limit, which would have capped cash ISAs at £12,000 a year for under-65s from April 2027, has been cancelled. Savers can still put the whole £20,000 allowance into cash. With the tax on savings interest going up, keeping savings inside an ISA, where the interest is tax free, matters more. The ISA allowance calculator shows how much of this year's allowance you have left.
Two Lifetime ISA changes came with it. Using the money for a first home costing more than £450,000 is now charged at 20% instead of 25%, for withdrawals from 29 October 2026. And from April 2029 a new First Time Buyer ISA will replace the Lifetime ISA for new savers, while existing holders can carry on under the current rules. The Lifetime ISA calculator includes the lower charge.
The trading allowance triples to £3,000 from 6 April 2027
The trading allowance is the amount of income from a side business, freelancing or selling you can earn before you need to tell HMRC or pay tax on it. It rises from £1,000 to £3,000, and the point at which you need to report that income through Self Assessment rises to £3,000 too. If your side income is small, this could take you out of filing altogether.
Making Tax Digital reaches incomes over £30,000 from 6 April 2027
Sole traders and landlords whose combined income from self-employment and property is over £30,000 will need to keep digital records and send HMRC quarterly updates through compatible software. This stage was already planned, so if you are close to the line, now is the time to choose software and get your records in order. The self-employed tax calculator shows what your profit means in tax and National Insurance.
Bigger first-year allowance on equipment from 1 January 2027
The first-year allowance for main-rate plant and machinery, the kind of equipment most businesses buy, rises from 40% to 50% for spending on or after 1 January 2027. In plain terms, you can deduct half the cost from your taxable profit in the year you buy it. If you were already planning a purchase around the turn of the year, the timing is worth checking with your accountant.
Business Asset Disposal Relief limit halves from 6 April 2027
Business Asset Disposal Relief lowers the Capital Gains Tax on selling all or part of a qualifying business. The lifetime limit on gains that qualify drops from £1 million to £500,000 for disposals on or after 6 April 2027. There are transitional rules for contracts already entered into, so anyone part way through a sale should take advice.
The National Living Wage rises to £13.21 from April 2027
| Rate | From April 2027 |
|---|---|
| National Living Wage, 21 and over | £13.21 an hour |
| 18 to 20 | £11.27 an hour |
| 16 to 17, and apprentices | £8.31 an hour |
That is a 3.9% rise for workers aged 21 and over. Employers can use the employee cost calculator to see what a rise means once employer National Insurance and pension are added, and workers can check the take-home effect with the hourly rate calculator.
Company profits: changes planned for April 2028
The government also said it will change the rules on how profits are paid out of companies, from April 2028. The detail is still to come. Dividend rates are not changing for now, so the dividend tax calculator and the limited company vs sole trader calculator still reflect the current position.
Key dates
- 1 January 2027: 50% first-year allowance on main-rate equipment begins.
- April 2027: National Living Wage rises to £13.21.
- 6 April 2027: new rates on property and savings income, the £500,000 Business Asset Disposal Relief limit, the £3,000 trading allowance and Making Tax Digital for incomes over £30,000.
- April 2028: planned changes to how profits are taken out of companies.
- April 2029: the First Time Buyer ISA replaces the Lifetime ISA for new savers.
- 5 April 2031: the end of the current freeze on the Personal Allowance and basic rate limit.
What this means for our calculators
Every calculator on Calcbase uses 2026/27 rates, which are still the rates that apply today. We will add the 2027/28 figures, including the new property and savings rates, before the new tax year starts on 6 April 2027.
Sources: HM Treasury and HMRC, Budget 2026: overview of tax legislation and rates and Annex A: rates and allowances; changes to tax rates for property and savings income; maintaining thresholds until 5 April 2031; Making Tax Digital over £30,000; HMRC, Tax-free savings newsletter 24; Low Pay Commission, National Living Wage to £13.21. Checked 1 November 2026.
This is general information, not financial or tax advice.
It explains published rules and figures. Your own position depends on your full circumstances,
so speak to a qualified adviser before acting on it.