Content Writer
Head of Sales
Buy-to-let lenders don't work out what you can borrow the same way as a residential mortgage. Instead mortgages for landlords are calculated mostly based on how much rent the property will bring in.
Our free buy-to-let mortgage calculator shows you how much you could borrow, whether your rent passes lenders' stress tests and what your rental yield and monthly profit could look like.
How this is calculated
Interest cover ratio (ICR): Lenders want your rent to cover your mortgage interest with room to spare. Basic-rate taxpayers and limited companies typically need rent of at least 125% of the interest. Higher and additional-rate taxpayers usually need 145%.
Stress test: The ICR is checked at a higher "stress" rate, not your actual rate. If you fix for five years or more, lenders usually test at 5.5% or your actual rate if higher. For shorter fixes, trackers and variable rates, they typically add 2% to your rate.
Maximum loan: We divide your annual rent by the ICR and stress rate to find the most a lender is likely to offer. This is then capped at 75% loan-to-value (LTV).
Monthly payments: Interest-only payments are your loan multiplied by your rate, divided by 12. Repayment mortgages use the standard mortgage formula.
Yields: Gross yield is your annual rent divided by the property value. Net yield is your annual rent minus your mortgage payments, divided by the property value.
Calculations all done? Now get the advice you need...
How to use our buy-to-let mortgage calculator
- Enter the property value and your deposit: we'll work out your loan and LTV.
- Add the monthly rent: use a letting agent's valuation or similar listings nearby, not a best-case guess.
- Choose interest-only or repayment: you can switch to compare both.
- Pick your fixed-rate period: try both options to see how much the stress test changes.
- Select your tax band: this sets whether you're tested at 125% or 145%.
What your results mean
- Maximum loan: the most a typical lender may offer on this rent, capped at 75% LTV.
- ICR achieved: how comfortably your rent covers the stressed interest. Above the threshold is a pass.
- Monthly profit: rent minus your mortgage payment, before letting fees, repairs, insurance and tax.
- Gross and net yield: a quick way to compare one property with another.
How accurate is the calculator?
It's a good guide, but lenders also look at:
- Your personal income (some want £25,000 or more a year)
- Your credit history
- Your age at the end of the term
- Your experience as a landlord
- The property type, such as flats above shops, HMOs or new builds
Treat your results as an estimate. An adviser can tell you which lenders are likely to accept your case.
Example calculations
These examples are illustrative only. Stress rates and ICRs vary between lenders.
Example 1: Same property, three different landlords
A £240,000 flat lets for £1,150 a month. Each landlord wants a £180,000 loan (75% LTV) at 5% on an interest-only basis.
Factor | Basic-rate, 5-year fix | Higher-rate, 5-year fix | Higher-rate, 2-year fix |
|---|---|---|---|
ICR needed | 125% | 145% | 145% |
Stress rate | 5.5% | 5.5% | 6.75% |
Maximum loan on this rent | £180,000 (capped at 75% LTV) | £173,041 | £140,996 |
Shortfall against £180,000 | None | £6,959 | £39,004 |
The same rent supports almost £40,000 less borrowing on a two-year fix for a higher-rate taxpayer. Choosing a five-year fix, buying through a limited company or using top slicing could close the gap.
For the basic-rate landlord, the monthly interest is £750. That leaves £400 a month before costs. Gross yield is 5.75% and net yield after mortgage payments is 2%.
Example 2: How much rent do you need?
Maximum loan based on monthly rent, before the 75% LTV cap.
Monthly rent | 125% ICR at 5.5% | 145% ICR at 5.5% | 125% ICR at 6.75% | 145% ICR at 6.75% |
|---|---|---|---|---|
£750 | £130,909 | £112,853 | £106,667 | £91,954 |
£1,000 | £174,545 | £150,470 | £142,222 | £122,605 |
£1,250 | £218,182 | £188,088 | £177,778 | £153,257 |
£1,500 | £261,818 | £225,705 | £213,333 | £183,908 |
£1,750 | £305,455 | £263,323 | £248,889 | £214,559 |
£2,000 | £349,091 | £300,940 | £284,444 | £245,211 |
Example 3: Interest-only vs repayment
At 5.5% over 25 years.
Loan | Interest-only | Repayment | Monthly difference | Still owed at the end (interest-only) |
|---|---|---|---|---|
£125,000 | £572.92 | £767.61 | £194.69 | £125,000 |
£175,000 | £802.08 | £1,074.65 | £272.57 | £175,000 |
£225,000 | £1,031.25 | £1,381.70 | £350.45 | £225,000 |
£275,000 | £1,260.42 | £1,688.74 | £428.32 | £275,000 |
£350,000 | £1,604.17 | £2,149.31 | £545.14 | £350,000 |
Interest-only keeps your monthly costs down and improves cash flow. Most landlords plan to repay the loan by selling the property or refinancing.
Example 4: The cash you'll need upfront
Buying the same £240,000 flat in England as an additional property:
Cost | Amount |
|---|---|
25% deposit | £60,000 |
Stamp duty with the 5% surcharge | £14,300 |
Lender, legal and survey fees | Typically £2,000 to £5,000 |
Total | Around £76,000 to £79,000 |
Stamp duty works differently in Scotland (LBTT) and Wales (LTT).
Example 5: Tax on £1,300 a month rent with £9,000 a year mortgage interest
Owner | Tax in 2026/27 | Tax from April 2027 | Left after interest and tax (from April 2027) |
|---|---|---|---|
Basic-rate taxpayer, own name | £1,320 | £1,584 | £5,016 |
Higher-rate taxpayer, own name | £4,440 | £4,704 | £1,896 |
Limited company (19%) | £1,254 | £1,254 | £5,346 (kept in the company) |
This is a simplified example with no other costs or allowances. Company mortgage rates are often higher, and you'll pay dividend tax when you take money out. Moving properties you already own into a company can also trigger stamp duty and capital gains tax. Speak to a tax adviser before you decide.
What if your rent doesn't cover the stress test?
If the calculator shows a shortfall, you still have options:
- Put down a bigger deposit: a smaller loan needs less rent to pass.
- Fix for five years or more: many lenders stress-test longer fixes at a lower rate.
- Use top slicing: some lenders let your personal income make up a rent shortfall.
- Buy through a limited company: companies are usually tested at 125%, not 145%.
- Choose a specialist lender: some set lower ICRs or stress rates.
Our expert says:
“A buy-to-let calculator can tell you the rental yield, but a good yield isn’t the whole story. Check your numbers still work if interest rates go up or the property sits empty for a while, so you know it can pay its way over the long run.
From April 2027, tax on rental income goes up by 2 percentage points, which will eat into landlords’ profits on top of any rate rises."
Neil Mulhearn Tips to boost how much you could borrow
- Get a realistic rent valuation: lenders will check it against their own surveyor's figure.
- Compare fixed-rate periods: a five-year fix can unlock more borrowing.
- Check your credit file: fix any errors before you apply.
- Save a bigger deposit: 40% or more can open up the lowest rates.
- Keep your accounts tidy: portfolio landlords will need a clear schedule of properties, rents and mortgages.
- Speak to a specialist broker: criteria vary widely, and some lenders only work through brokers.
Why choose Echo Finance?
Whether you're a first-time landlord, portfolio landlord, or limited company landlords, whole-of-market advice from experienced buy-to-let specialists will help you maximise the suitability of your mortgage. At Echo Finance, we have access to many specialist lenders, and arrange mortgages for HMOs, holiday lets and complex BTL cases every day.
Here are just some of the reasons others have chosen to work with our buy-to-let experts:
- Whole-of-market advice from experienced, FCA-authorised advisers
- Specialists in complex cases, including self-employed borrowers and bad credit
- Local advisers across the UK, by phone, video or in person
- Free initial consultation with no obligation
Ready to compare your options? Get started here for a free, no-obligation chat with one of our advisers.
FAQs
No. The calculator doesn't run a credit check or store your details, so you can use it as often as you like.
Find your local adviser
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.