Buy-to-let mortgage calculator
Compare interest-only and capital repayment costs on a buy-to-let loan, then check the rent against the lender's interest coverage ratio stress test before you make an offer.
Loan details
Mainstream lenders cap at 75% loan to value, so at least £62,500 (25%) here
Pre-filled with the current UK average — edit for your own product
Loading current UK mortgage rates…
Used for the repayment comparison
Arrangement fee, whether paid up front or added to the loan
One-off costs in year one
Used for the personal vs limited company comparison
Lender stress test
Typically 5.5%, or pay rate on a 5-year fix
Monthly cost
Stress test
The lender needs £1,246 per month at 145% coverage on a 5.50% stress rate. You have entered £1,200.
Indicative only. Lenders apply their own criteria, fees and top-slicing rules — speak to a qualified broker before relying on these figures.
Assumptions & sources
Every figure above is calculated from the inputs you entered using the rules below. Tap a reference to read the primary source.
- Interest-only payment[1]
Monthly cost is loan x rate / 12; repayment uses the standard amortisation formula.
- Interest cover ratio[2]
Lenders test rent against interest at a stressed rate, typically 125% for basic-rate and 145% for higher-rate landlords.
- Stress rate floor[2]
PRA underwriting standards require a stressed rate assumption of at least 5.5% in most cases.
- Finance cost relief[3]
Mortgage interest is relieved at 20% basic rate, not deducted from rental profit.
- [1]MCOB: responsible lending and affordabilityFinancial Conduct Authority — Mortgage affordability assessment principles
- [2]SS13/16: Underwriting standards for buy-to-let mortgage contractsBank of England Prudential Regulation Authority — Interest cover ratio and stress-rate expectations
- [3]Tax relief for residential landlords: how it's worked outHMRC — Basic-rate finance cost relief treatment
Read how we verify and refresh these figures in our data methodology.
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Start for freeHow much can I borrow on a buy-to-let mortgage?
Buy-to-let borrowing is decided by the rent, not by your salary. The lender takes the annual rent, divides it by the interest coverage ratio, then divides that by the stress rate. Everything else — deposit, term, whether you take interest-only or repayment — sits on top of that one sum.
Maximum loan = annual rent ÷ interest coverage ratio ÷ stress rate
On the figures you have entered, £1,200 a month is £14,400 a year. At 145% coverage that supports £9,931 of stressed interest, and at a 5.50% stress rate that is a maximum loan of £180,564. At the same loan to value that is a purchase price of roughly £240,752, or on this £250,000 property it means a deposit of at least £69,436.
A quick sense-check you can carry round a viewing: at 5.50% and 145% coverage, every £100,000 of borrowing needs about £665 a month in rent.
Worked example: a £250,000 property let at £1,200 a month
This walkthrough rewrites itself from the numbers in the calculator — change any input and the example follows.
A deposit of £62,500 (25% of the price) leaves a loan of £187,500, which is 75.00% loan to value. Mainstream buy-to-let lenders currently cap at 75% (£187,500 on this property), specialists stretch to 80% (£200,000), and the sharpest pricing starts at 60% or below. Here the rent, not the cap, is the binding constraint.
At a 5.25% pay rate, interest-only costs £820 a month — £9,844 a year — leaving £380 a month before running costs. The same loan on capital repayment over 25 years costs £1,124 a month, which leaves £76, and repays £149,577 of interest across the full term while clearing the debt.
Now the lender's test. Stressed at 5.50%, the interest on £187,500 is £859 a month. At 145% coverage the rent must be at least £1,246. You have entered £1,200, so the case is £46 a month short — you would need roughly £69,436 of deposit instead, a five-year fix assessed at pay rate, or a lender that will top-slice.
Product choice moves the answer more than most landlords expect. Assessed at the 5.25% pay rate, as many five-year fixes are, the same rent supports £189,163 rather than £180,564 — a difference of £8,598. Borrowing through a limited company at 125% coverage instead of 145% would support £209,455.
The same rent, three different products
What £1,200 a month of rent will actually support, depending on how the lender assesses it.
| How it is assessed | Coverage | Rate used | Maximum loan |
|---|---|---|---|
| Two-year fix, stressed | 145% | 5.50% | £180,564 |
| Five-year fix, pay rate | 145% | 5.25% | £189,163 |
| Limited company | 125% | 5.50% | £209,455 |
Illustrative. Lenders differ on stress rates, coverage ratios, fee treatment and top-slicing, and a limited company structure carries extra rates, fees and accountancy costs to weigh against the larger loan.
What the product fee really costs you
A low headline rate with a large arrangement fee is often the more expensive deal. Your fee of £1,995 is 1.06% of a £187,500 loan.
Pay it up front and year one costs £13,339 in total — £9,844 of interest-only payments, the £1,995 fee and £1,500 of valuation, legal and broker costs.
Add it to the mortgage instead and the loan becomes £189,495, the monthly payment rises to £829, and year one costs £11,448. You keep £1,995 in your pocket at completion, but you pay roughly £105 a year of extra interest on it for as long as it stays on the balance — and it is still owed at redemption.
Some lenders also assess affordability on the fee-inclusive loan, so adding the fee can quietly shrink the maximum you can borrow. Always compare deals on total cost over the fixed period, not the rate on the poster.
Personal name or limited company, on your numbers
Interest-only, £14,400 of annual rent against £9,844 of mortgage interest, at a 40% personal tax rate.
| Line | Own name | Limited company |
|---|---|---|
| Annual rent | £14,400 | £14,400 |
| Mortgage interest | Not deductible (20% credit) | £9,844 deductible |
| Taxable amount | £14,400 | £4,556 |
| Tax | £3,791 at 40% less credit | £866 at 19% |
| Net cash after interest and tax | £765 | £3,691 |
On these figures the company keeps £2,926 a year more, before accountancy fees and the cost of getting the money out as salary or dividends.
Simplified illustration: interest-only, no non-interest running costs, and no allowance for dividend or salary tax when taking profit out of a company. Corporation tax shown at 19% based on profit level. Not tax advice — speak to an accountant before choosing a structure.
Download your mortgage worksheet
Export the figures currently in the calculator — loan, loan to value, monthly cost on both repayment types, the stress test and your maximum borrowing — as a spreadsheet to send to a broker or keep with your deal appraisal.
Opens in Excel, Numbers or Google Sheets. Nothing is uploaded — the file is generated in your browser.
Buy-to-let mortgage questions landlords search for
How much rent do I need for a £200,000 buy-to-let mortgage?
At a 5.5% stress rate and 145% coverage, £200,000 of borrowing needs about £1,329 a month. At 125% coverage the same loan needs roughly £1,146. Change the coverage or the stress rate in the calculator to see your own threshold.
Can I get a buy-to-let mortgage on my salary alone?
No. Most lenders require a minimum personal income, commonly £25,000, but that is an eligibility gate rather than the borrowing calculation. The loan size still comes from the rent. Salary only stretches the loan where a lender offers top-slicing.
Why is interest-only standard on buy-to-let?
Because it protects monthly cash flow and, for personally held property, mortgage interest attracts the basic-rate tax credit rather than being a deductible expense. The capital is still owed at the end of the term, so plan the exit — sale, refinance, or repayment from surplus income.
What happens when my fixed rate ends?
You revert to the lender's standard variable rate, which is usually several percentage points higher and can turn a profitable let into a loss overnight. Start comparing products six months before expiry. Re-run the yield at the new rate before you commit to anything.
What other costs sit alongside the mortgage?
Arrangement fees of up to 3%, valuation and legal fees, additional-property stamp duty, and the compliance cycle — the annual gas safety check, the five-yearly EICR and holding the EPC minimum standard.
Frequently asked questions
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OpenAbout the publisher
This page is published by NestIQ Wealth, a UK property management and compliance platform used by self-managing landlords to track statutory deadlines, store certificates with full version history, and evidence compliance per property. Our guidance is written by the team that builds those compliance rules into the product, so the dates, cycles and penalties here are the same ones the software enforces.
- •Researched from primary sources. Every rule is checked against legislation.gov.uk, GOV.UK guidance and the responsible regulator — never rewritten from other blogs. See how we source our data.
- •Reviewed as the law changes. Pages carry a visible review date and are revisited when legislation, deadlines or penalty levels move.
- •No hidden commission. We are not paid to refer you to contractors, brokers or agents. Costs quoted are illustrative market ranges, not quotes or offers.
- •Guidance, not regulated advice. Nothing here is legal, tax or financial advice. For decisions specific to your circumstances, speak to a solicitor, accountant or qualified adviser.
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