buy to let mortgage relief

[johnwilliams79]

I have a question about the changes to mortgage relief for buy to lets. I generally understand the changes but not the exact calculation as they taper in the changes.

My aim is to keep my income flat at £100k to avoid losing my personal allowance. Anything over £100k I’m going to make pension contributions for.

Let’s say I earn exactly £100k in my job.
I then have rental income of £4000
I then have mortgage of £4000.
In the old days that would cancel out and I’d be back to an income of £100k

For 2017-2018 my understanding is that I will get to claim
40% relief on 75% of the mortgage ie £3000
20% relief on 25% of the mortgage ie £1000

Losing the tax relief is annoying but not the end of the world.
My question is how does the calculation work?
Will my new income be £100k?
Will my new income be £101k?
Will my new income be £104k?

I hope this makes sense.

Thanks

[maths]

2017/18

Earnings 100k
Rent after mortgage nil
add back 25% x 4,000 interest 1,000

total 101,000