Buy-to-let calculator
Work out the rental yield, monthly cashflow and lender rental cover on a potential buy-to-let property before you make an offer.
Letting agent fees, insurance, maintenance, void periods, etc.
Monthly profit
£391
After interest-only mortgage payment and running costs
Gross rental yield
6.72%
Net yield
6.00%
Mortgage (interest-only)
£859
Rental cover (ICR)
163%
Loan amount
£187,500
Most buy-to-let lenders require rental cover (ICR) of at least 125% for basic-rate taxpayers and 145% for higher-rate. Your figures pass the common stress threshold. Figures don't include tax — speak to an accountant for a full picture.
What lenders look for
Buy-to-let affordability is stress-tested against your tax bracket. Lenders apply a higher notional interest rate (often 5.5% or more) and then require the rent to cover the stressed mortgage payment by a set margin — called the Interest Cover Ratio (ICR).
- Basic-rate taxpayers: rental income must cover at least 125% of the stressed mortgage payment.
- Higher and additional-rate taxpayers: the required cover rises to 145%.
This means the same property and rent can support a larger loan for a basic-rate taxpayer than for a higher-rate taxpayer. Limited companies usually use a flat 125% cover because corporation tax applies instead.
Costs this calculator doesn't include
- Stamp Duty — buy-to-let purchases attract a 5% surcharge on top of standard SDLT rates.
- Income tax on rental profits, plus changes to mortgage interest relief for individual landlords.
- Capital gains tax on disposal, conveyancing fees and any safety certificates (gas, EICR, EPC).
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