Buy-to-Let Mortgage Calculator
Enter the price, deposit, rate and rent to see your interest-only payment, whether the rental cover passes and the maximum loan the rent supports.
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Test whether a buy-to-let purchase stacks up: payments, rental cover (ICR), maximum loan and gross yield.
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How buy-to-let mortgages are assessed
Most buy-to-let mortgages are interest-only, so the monthly payment is simply loan × rate ÷ 12. Lenders mainly look at the rent, not your salary: the rent must cover the interest by a set margin, called the interest cover ratio (ICR). The test is usually run at a stressed rate (often around 5.5%) rather than the rate you will actually pay, and the margin is commonly 125% for basic-rate taxpayers and 145% for higher-rate taxpayers.
Rental cover example
A £150,000 mortgage at a 5.5% stress rate costs £8,250 of interest a year. At 125% ICR the annual rent needed is £10,313, or about £859 a month. This calculator reverses it too: it shows the highest loan your rent supports.
| Term | What it means |
|---|---|
| Gross yield | Annual rent ÷ property price |
| LTV | Loan as a percentage of the property value; 75% is common for buy-to-let |
| ICR | Annual rent ÷ annual interest at the stress rate |
| Deposit | Typically 25% or more for buy-to-let |
Costs people forget
- Stamp duty: a 5% surcharge on every band applies to additional properties in England and Northern Ireland; see the stamp duty calculator.
- Letting agent fees, maintenance, insurance, void periods and landlord licensing.
- Income tax on rental profit; mortgage interest is relieved at the basic rate rather than deducted in full.
This is an illustration, not mortgage advice; lenders set their own criteria and rates change. Speak to a mortgage broker before you buy.
How to use the buy-to-let mortgage calculator
- Enter the property price, deposit and mortgage rate.
- Add the monthly rent, the lender stress rate and required cover (ICR).
- Read the payments, cover, highest supportable loan and gross yield.
Frequently asked questions
How is a buy-to-let mortgage payment calculated?
Most are interest-only, so the monthly payment is the loan × annual rate ÷ 12. A £150,000 loan at 5% costs £625 a month in interest.
What is rental cover (ICR)?
The annual rent divided by the annual interest, tested at a stressed rate. Lenders typically want 125% to 145%.
How much deposit do I need for buy-to-let?
Usually 25% of the price, though some lenders accept 15% to 20% with higher rates.
What is a good gross yield?
Many investors look for 5% to 8% gross, but net returns after costs, tax and voids are what matter.
Does the rental stress test use my actual rate?
No. Lenders use a higher stressed rate (often about 5.5%) to check the rent would still cover the interest if rates rose.
Related tools: UK stamp duty calculator · Mortgage calculator · UK income tax calculator