Buy-to-Let Mortgage Calculator

Estimate your monthly buy-to-let mortgage payments on an interest-only or repayment basis, and check whether your rent passes the lender's ICR stress test.

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Most buy-to-let lenders want at least 25%.
Lender stress test
Lenders decide how much they'll lend by testing your rent against a stressed rate, not the rate you'll pay.
Commonly 5.5%, or your rate plus 1-2%. Five-year fixes are often stressed lower.
Estimate only. Lenders set their own stress rates, ICR requirements and maximum loan-to-values, and many apply a lower stress rate to five-year fixes. Product fees, early repayment charges and portfolio landlord rules are not included. Speak to a broker before relying on these figures. Not financial advice.

How to manually calculate your buy-to-let mortgage costs

Monthly interest is the loan amount times the interest rate, divided by 12. Interest coverage ratio is annual rent divided by annual mortgage interest times 100 - most lenders want 145% or above.

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Step 1

Work out the annual interest

Multiply the loan amount by the interest rate, then divide by 12 for the monthly figure. Most buy-to-let mortgages are interest-only, so that monthly interest is your actual payment.

Step 2

Work out your interest coverage ratio

Divide your annual rental income by the annual mortgage interest, then multiply by 100. That percentage is your ICR — the number lenders actually assess you on.

Step 3

Check it against the lender's threshold

Most want an ICR of at least 145%, stress tested at a rate higher than the one you'll pay. Come in under it and you'll need either higher rent or a smaller loan.

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Worked example

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A £180,000 interest-only loan at 5.5%, with the property let at £1,300 per month.

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Monthly interest = £180,000 × 5.5% ÷ 12 = £825

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ICR = (£15,600 ÷ £9,900) × 100 = 158% - above the 145% most lenders want

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Borrowing on a buy-to-let

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Interest only is the buy-to-let norm

Most buy-to-let mortgages are interest only. You pay the interest each month and repay the capital when you sell or refinance, which keeps monthly costs low and cash flow positive.

Repayment clears the debt over the term, but the rent often won't cover it.

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What the lender actually tests

Lenders decide how much you can borrow using the Interest Coverage Ratio - your rent tested against a stressed interest rate, not the rate you'll actually pay.

125% for basic-rate taxpayers and limited companies, 145% for higher-rate taxpayers.

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Why should you use our buy-to-let mortgage calculator?

  • Interest only and capital repayment side by side
  • Runs the ICR stress test lenders actually use, at 125% or 145%
  • Tells you the maximum loan your rent will support
  • Shows your monthly surplus after the mortgage is paid
  • Free, fast and no sign-up

FAQs

How much deposit do I need for a buy-to-let mortgage?

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Most buy-to-let lenders want at least 25%, so a maximum loan-to-value of 75%. Some go to 80% on a smaller range of products, and the best rates usually start at 40% deposit or more.

The deposit isn't the only cash you need - budget for stamp duty including the additional property surcharge, legal fees, a survey and any refurbishment.

Should a buy-to-let mortgage be interest only or repayment?

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Most buy-to-let mortgages are interest only, so you pay just the interest each month and repay the capital when you sell or refinance. Monthly payments are much lower, but you never chip away at the debt.

A capital repayment mortgage clears the loan over the term. Payments are higher, and on many buy-to-lets the rent won't comfortably cover them - which is why interest only is the norm.

What is the ICR stress test on a buy-to-let mortgage?

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The Interest Coverage Ratio is the test lenders use to decide how much they'll lend. They check whether your rent covers the mortgage interest by a set margin, calculated at a stressed interest rate rather than the rate you're actually paying.

Typical requirements are 125% for a basic-rate taxpayer or a limited company, and 145% for a higher-rate taxpayer. So a higher-rate landlord needs rent worth 145% of the stressed interest payment.

What stress rate do buy-to-let lenders use?

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Lenders don't test affordability at your actual rate - they test at a higher "stress rate", typically around 5.5% or your product rate plus 1-2%, to check the loan still works if rates rise.

Five-year fixes are often stressed at a lower rate, or at the pay rate itself, which is one reason they can support a larger loan than a two-year fix.

Can I still deduct buy-to-let mortgage interest from my tax?

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Since Section 24 finished phasing in, individual landlords can no longer deduct mortgage interest as an expense. Instead you get a tax credit worth 20% of the interest, which means higher-rate taxpayers effectively get relief at 20% rather than 40%.

That's why the ICR test is stricter for higher-rate taxpayers, and part of why some landlords hold property through a limited company, where interest remains a deductible cost.