Free tool for UK landlords
Work out your maximum borrowing from the rent, using lender ICR and stress rate rules, plus the monthly payment and the rent a given loan would need.
Fill in the fields to see your affordability calculation
Important, not financial advice: This calculator gives estimates only and uses typical ICR and stress rate rules; actual lending criteria and mortgage offers vary between lenders, and rates, fees and policies change. It is your responsibility to confirm the figures. Always speak to a qualified mortgage broker or financial adviser before relying on any number.
Buy to Let mortgage affordability is assessed very differently from residential mortgages. Instead of focusing primarily on your personal income, lenders assess whether the rental income can cover the mortgage payments with sufficient margin.
Key factors lenders consider:
The same affordability test is run again each time you remortgage, so before switching deals it is worth checking the rent still covers the new loan. The remortgage and ERC calculator then weighs the saving from a new rate against the early repayment charge for leaving early.
Affordability is usually assessed on an interest only basis. Even if you plan to take the mortgage on repayment, most lenders test whether the rent covers the interest at a stressed rate, so that is what this calculator uses. To see the monthly cost on a repayment basis, use the profit and ROI calculator.
Loan to Value (LTV) is the percentage of the property value that you're borrowing. The remainder is your deposit.
How LTV works:
Impact on interest rates:
Strategic consideration: While higher LTV means lower deposit, the higher interest rate can significantly impact your returns. Many investors find 75% LTV offers the best balance of leverage and affordability. Once you have a figure, the stamp duty calculator and the profit and ROI calculator help you size the full deal.
Unlike a residential mortgage, the amount is set mainly by the rent the property earns, not your salary. The lender takes the monthly rent, applies its interest cover ratio and a stressed interest rate, and works back to the largest loan that rent can support. Most lenders also cap the loan at around 75 to 80% of the property value, so your deposit matters too. The figure at the top of this calculator is that rent-based maximum, capped at 75% loan to value.
Lenders use an interest cover ratio, or ICR. They check that the annual rent is at least a set percentage of the mortgage interest, worked out at a stressed rate that is higher than the rate you actually pay. The common thresholds are 125% for a basic rate taxpayer or a limited company, and 145% for a higher rate taxpayer borrowing in their personal name. If the rent clears that margin the loan usually passes; if it does not, you either borrow less or need more rent.
A rough rule of thumb is about £5.50 to £6 of monthly rent for every £1,000 you want to borrow, based on a 125% ICR at a stress rate around 5.5%. Higher rate taxpayers usually need more because their ICR is 145%. The rent needed line in the results gives you the exact figure for the loan, rate and tax band you have entered, rather than the rule of thumb.
It comes from the 2020 change to mortgage interest tax relief, which HMRC explains in its guidance for residential landlords. Landlords in personal name can no longer deduct mortgage interest before tax and instead get a 20% tax credit, so a higher rate taxpayer keeps less of the rent after tax. Lenders set a higher ICR, usually 145%, to leave that larger tax bill covered. Borrowing through a limited company is taxed differently, which is why company cases are usually assessed at 125%. This is general information, not tax advice.
Sometimes, yes. Some lenders allow top slicing, where surplus personal income is used to bridge a small gap between the rent and the stressed payment. The lender usually wants to see that the income is genuinely spare and comes from something other than the property itself. Not every lender offers it, so it is worth checking criteria or asking a broker before relying on it.
Often, yes. Many lenders stress a 2 year fix at a higher rate, commonly the pay rate plus around 2%, while a 5 year fix is usually stressed at or near the actual rate. A gentler stress on the 5 year deal means the same rent can support a larger loan, which is one reason landlords stretching affordability lean towards 5 year fixes. This calculator follows that convention, so switching the term changes the result.