Buy-to-Let Mortgage Calculator
Enter a UK buy-to-let deal and see monthly cashflow, gross yield, return on cash employed, stamp duty and whether it passes a lender's stress test — free, no sign-up.
On by default — buy-to-lets are almost always a second or subsequent property. Editable.
Net cashflow PCM
£190
£2,284 per year
Gross yield
6.80%
ROCE (cash-on-cash)
4.27%
Total cash needed
£53,500
Deposit £37,500
Passes lender stress test (ICR 165% vs 125% required)
Stressed at 5.50% — £6,188 annual interest.
| Purchase price | £150,000 |
| Stamp Duty Land Tax (SDLT) | £8,000 |
| Buying costsBroker, survey, sourcing and other fees | £3,000 |
| Refurb & one-off costs | £5,000 |
| Project cost | £166,000 |
| Rental income | £850 |
| Other income | £0 |
| Ground rent / service charge | −£0 |
| Building insurance | −£25 |
| Boiler / other insurance | −£15 |
| Utilities | −£0 |
| Management fee10% of rent | −£85 |
| Other costs5% of rent | −£43 |
| Mortgage payment (interest-only)£112,500 at 5.25% | −£492 |
| Net cashflow PCM | £190 |
Rates last verified August 2026
How a buy-to-let mortgage is actually assessed
When you apply for a buy-to-let mortgage, the lender is not really underwriting you — it's underwriting the rent. The test is whether the property's rental income covers the mortgage interest with enough headroom to survive rate rises, void periods and repairs. To do that, lenders ignore the pay rate on your product and re-run the interest at a higher notional figure, commonly a floor of around 5.5% a year. That stressed interest, not your real monthly payment, is what the affordability calculation uses.
The margin they require is the interest coverage ratio, or ICR. A 125% ICR means the annual rent must be at least 1.25 times the stressed annual interest; 145% means 1.45 times. Which one applies depends on how the income is taxed. Basic-rate taxpayers and limited-company borrowers are usually assessed at 125%, because mortgage interest is either lightly taxed or a deductible business cost. Higher- and additional-rate taxpayers borrowing in their own name are generally assessed at 145%, since the tax treatment of personal mortgage interest leaves them with less of the rent. If a deal fails, the calculator above shows exactly how much more monthly rent would be needed to clear the threshold — which is often more informative than the pass/fail itself, because it tells you whether you are marginally short or nowhere near.
Gross yield, net cashflow and ROCE are three different things
Gross yield is annual rent divided by the purchase price. It is useful for comparing areas at speed, and useless for deciding whether a deal works, because it ignores every cost: the mortgage, management fees, insurance, ground rent and service charges, voids and maintenance. Two properties at the same gross yield can produce wildly different monthly outcomes once those are deducted.
Net cashflow is what is actually left each month after the mortgage and every running cost. Return on cash employed (ROCE) then divides your annual net cashflow by the total cash you had to put in — deposit, stamp duty, legal and broker fees, survey, refurb and any sourcing fee. That last figure is the honest one, because it measures the return on money you no longer have access to. A cheap property with heavy stamp duty and a big refurb can show a strong gross yield and a poor ROCE; a more expensive property bought with a smaller cash outlay can be the better investment on the same rent.
Stamp duty is often the biggest single hidden cost in a buy-to-let. The additional property surcharge applies on the full purchase price, not just the top slice, and each UK nation treats it differently — so the calculator works it out from the region and buyer type rather than asking you to guess.
Buy-to-let mortgage calculator: common questions
- How is buy-to-let mortgage stress testing calculated?
- Lenders don't test your rent against your actual pay rate. They stress the loan at a notional rate — this calculator uses a 5.5% floor, in line with mainstream buy-to-let lender criteria — then check whether the annual rent covers that stressed interest by the required margin. The result is the interest coverage ratio (ICR).
- What interest coverage ratio do I need?
- Basic-rate taxpayers and limited-company borrowers are typically assessed at 125% cover, meaning rent must be at least 1.25 times the stressed annual interest. Higher- and additional-rate taxpayers borrowing personally are usually assessed at 145%. The calculator applies whichever applies to the buyer type and tax position you select, and tells you how much extra monthly rent you'd need to pass.
- What's a good rental yield for a buy-to-let?
- Gross yield is annual rent divided by purchase price. It's a quick screening number, not a return: a 5% gross yield in a low-rate area can cashflow better than an 8% gross yield carrying heavy management, insurance and service-charge costs. Judge the deal on net cashflow and return on cash employed rather than gross yield alone.
- Do I pay more stamp duty on a buy-to-let?
- Usually yes. In England and Northern Ireland an additional-property surcharge of 5% is added on the full price for purchases from £40,000 upward, on top of the standard SDLT bands. Scotland charges an 8% Additional Dwelling Supplement instead, and Wales applies a separate higher-rate residential table. This calculator works out the correct figure for the region and buyer type you choose.
- Does buying through a limited company change the numbers?
- It changes both the tax and the lending test. Companies do not get first-time buyer relief and, in England and Northern Ireland, purchases at or above £500,000 can attract a flat 15% rate. On the lending side, company borrowers are generally assessed at the lower 125% interest coverage ratio because the mortgage interest is a business cost rather than a personally taxed one.
Figures are estimates, not financial advice.