Buy-to-Let Mortgage Calculator
Enter the property price, deposit, rate and monthly rent to see the interest-only payment, gross and net rental yield, and whether the rent passes the lender's stress test.
Last updated 4 July 2026 · Written and reviewed by Mustafa Bilgic
Buy-to-let mortgage calculator
Payments, yield and the rental cover stress test.
Estimate only. Lenders stress-test at a notional rate (often 5.5%). Confirm criteria with the lender.
How buy-to-let mortgages differ
Buy-to-let (BTL) mortgages are for property you rent out, and they work differently from a residential mortgage. They're usually interest-only, so you pay just the interest each month and repay the capital when you sell or refinance. Lenders need a bigger deposit — typically 25% or more — and, crucially, they lend based on the rent the property earns rather than your salary, using a rental cover stress test.
A £250,000 property with a £62,500 (25%) deposit means a £187,500 loan. At 5.2% interest-only that's about £813 a month. Rent of £1,250 gives a 6% gross yield and comfortably passes the 145% cover test.
Rental yield explained
Gross rental yield is the annual rent as a percentage of the property price — a quick way to compare investments. Net yield subtracts running costs (letting fees, insurance, maintenance, void periods, ground rent) and is the figure that really matters. As a rough guide, budget 20–30% of rent for costs. A high headline yield in a cheaper area can beat a prestigious low-yield property once costs and the mortgage are taken into account.
| Measure | What it tells you |
|---|---|
| Gross yield | Annual rent ÷ property price |
| Net yield | Rent after costs ÷ property price |
| ICR (rental cover) | Rent ÷ mortgage interest at stress rate |
| Typical stress rate | Around 5.5% (varies by lender) |
The rental cover (ICR) stress test
This is the make-or-break test. Lenders require the rent to cover the mortgage interest by a margin — the Interest Cover Ratio — calculated at a notional stress rate (often around 5.5%), not your actual pay rate. Basic-rate taxpayers and many limited-company landlords need 125%; higher-rate taxpayers usually need 145%. If the rent falls short, you must borrow less or put down a bigger deposit. This calculator shows whether your rent passes and the maximum loan it supports.
Tax on rental profit
Since the Section 24 changes, individual landlords can no longer deduct mortgage interest as an expense; instead they get a 20% tax credit on the interest, which hits higher-rate landlords hardest. Many now hold property through a limited company, where interest is still fully deductible but Corporation Tax and extra admin apply. Model your position with our rental income tax calculator and, for a company structure, the corporation tax calculator.
Costs beyond the mortgage
Buy-to-let carries a 3% Stamp Duty surcharge on second properties on top of the standard rates — a significant upfront cost our stamp duty calculator can estimate. Budget too for letting agent fees, landlord insurance, safety certificates, maintenance and void periods. When you eventually sell, Capital Gains Tax applies to the profit. Buy-to-let can be rewarding, but the numbers only work if the rent covers the mortgage with room to spare.
Frequently asked questions
How much deposit do I need for a buy-to-let?
Usually at least 25% of the property price, though the best rates often need 40%. Lenders also apply a rental cover stress test, so even with a large deposit the rent must cover the mortgage interest by 125% to 145% at a notional stress rate.
What is a good rental yield?
Gross yields of 5–8% are common for UK buy-to-let, but net yield after costs matters more. Budget 20–30% of rent for letting fees, insurance, maintenance and void periods. A cheaper property in a high-rent area often out-yields an expensive one.
What is the rental cover or ICR stress test?
Lenders check that the rent covers the mortgage interest by a set margin — 125% for basic-rate taxpayers and limited companies, 145% for higher-rate taxpayers — calculated at a notional stress rate of around 5.5%. If the rent falls short, you must borrow less.
Are buy-to-let mortgages interest-only?
Most are, so you pay only the interest each month and repay the capital when you sell or remortgage. This keeps monthly costs down and maximises rental profit, but the full loan remains outstanding, so you need a plan to repay it.
Do I pay extra Stamp Duty on a buy-to-let?
Yes. A 3% surcharge applies on top of standard Stamp Duty rates when you buy an additional residential property in England or Northern Ireland. On a £250,000 property that surcharge alone is £7,500, so factor it into your upfront costs.