About the UK Buy-to-Let Mortgage Calculator
Buy-to-let lenders in the UK size loans mainly on the rent the property will earn, not on your salary. They apply a rental cover or interest coverage ratio (ICR) test: the expected rent must cover the mortgage interest — calculated at a stressed rate — by a set margin, usually 125% or 145%. This calculator runs that test, compares it with the maximum loan-to-value (LTV), and tells you the largest loan, the deposit you need and the monthly payment.
It is aimed at landlords and first-time investors comparing properties, and at anyone checking whether a rental figure supports the mortgage they have in mind. Enter the expected monthly rent, the purchase price and the lender’s criteria from their product guide; you can switch between interest-only (the most common for buy-to-let) and repayment.
Under the Prudential Regulation Authority’s buy-to-let underwriting standards, lenders must stress the interest rate at no less than 5.5% unless the rate is fixed for five years or more, and higher-rate taxpaying individuals typically face a 145% ICR while limited companies and basic-rate taxpayers often get 125%. Criteria vary by lender, so treat the result as an estimate.
With the default inputs, the maximum loan is £218,181.82. Change any value above to recalculate instantly.
How to use the uk buy-to-let mortgage calculator
- 1Enter the expected monthly rent from a letting agent or comparable listings.
- 2Enter the purchase price and the lender’s maximum LTV.
- 3Pick the ICR and stress rate from the lender’s criteria.
- 4Choose interest-only or repayment and enter your pay rate.
- 5Read the maximum loan, deposit needed and monthly payment.
Formula and method
The rental cover test requires annual rent to be at least ICR × stressed annual interest. Rearranged, the most a lender will lend on the rent is annual rent ÷ (ICR × stress rate). For example, £15,000 of rent at a 125% ICR and 5.5% stress rate supports £15,000 ÷ (1.25 × 0.055) = £218,182. The lender also caps the loan at its maximum LTV of the price, and you can borrow the lower of the two.
The monthly payment uses your actual pay rate: interest-only is loan × rate ÷ 12, and capital repayment uses the standard amortization formula over the chosen term. Rent needed for the full-LTV loan reverses the ICR test. Lender fees, product-specific stress rates and top-slicing with personal income are not modelled.
- ICR
- Interest cover ratio required by the lender (e.g. 125% = 1.25)
- Stress rate
- Notional interest rate used for the test (e.g. 5.5%)
- LTV
- Maximum loan as a percentage of the property price
Worked examples
£1,250 rent on a £300k property at 125% ICR
Annual rent of £15,000 divided by 1.25 × 5.5% supports £218,182, slightly below the £225,000 75% LTV cap, so rent sets the limit and the deposit is £81,818. Interest-only at 4.5% costs £818 a month; you would need £1,289 rent to borrow the full 75%.
Higher-rate taxpayer: £2,000 rent, £400k price, 145% ICR
At a 145% ICR, £24,000 of rent supports £300,940, just above the 75% LTV cap of £300,000, so the LTV limit applies. Interest-only at 5% is £1,250 a month.
Repayment mortgage on a £250k flat
The rent supports £192,000 but the 75% LTV cap is £187,500, so that is the maximum loan. On a 25-year capital repayment basis at 5% the payment is £1,096.11 a month — almost all of the rent.
Frequently asked questions
What is the ICR for buy-to-let?+
The interest cover ratio is how much the rent must exceed the stressed mortgage interest. Most lenders use 125% for limited companies and basic-rate taxpayers and 145% for higher- or additional-rate taxpayers, because mortgage interest relief for individuals is restricted to a 20% tax credit.
What stress rate do buy-to-let lenders use?+
Under PRA rules lenders must test affordability at a rate of at least 5.5% unless the mortgage is fixed for five years or more. Many use the higher of 5.5% and pay rate plus 2%, while five-year fixes are often tested at the pay rate itself, which can increase borrowing.
How much deposit do I need for buy-to-let?+
Most buy-to-let mortgages need at least a 25% deposit (75% LTV), and the best rates usually start at 60%–65% LTV. If the rent does not support a full 75% loan, the rental cover test will require a bigger deposit, as this calculator shows.
Can I use my salary to borrow more on buy-to-let?+
Some lenders offer "top slicing", using surplus personal income to make up a rental shortfall. It is lender-specific and depends on your own commitments, so this calculator shows the rent-only figure most lenders start from.
Is buy-to-let usually interest-only?+
Yes, the majority of buy-to-let mortgages are interest-only, which keeps payments low and maximises cash flow, with the loan repaid from the sale or refinance of the property at the end of the term. Repayment mortgages build equity but cut monthly cash flow.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.