Buy-to-let mortgage calculator
Buy-to-let lending is based on rent, not salary. Enter the property value, the loan you want and the expected rent to see whether the rent passes a lender’s stress test and the largest loan it would support.
Result
- Loan to value
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- Gross rental yield
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- Interest-only payment per month
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- Rental cover at the stress rate
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- Rent needed for this loan
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- Maximum loan this rent supports
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- Stress test
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How this is worked out. Interest-only borrowing. Rental cover is the monthly rent divided by the monthly interest at the stress rate. Each lender sets its own stress rate and cover requirement, which depend on the product, your tax position and whether you borrow personally or through a company. Lenders also cap loan to value.
Want real figures for your deal?
Send us the details and a broker will come back with terms from lenders whose criteria fit, including every fee.
- Your figures from the calculator are included
- Costs set out before you commit
- No obligation to proceed
More about buy-to-let mortgages
Or call 07564 127446.
About this calculator
What is a rental stress test?
It is how a lender checks that the rent comfortably covers the mortgage. The lender works out the interest at a notional stress rate, which is usually higher than the rate you will pay, and requires the rent to exceed that figure by a set margin, known as the interest cover ratio.
Why are there different cover percentages?
Lenders set the margin according to the borrower and the property, typically somewhere between 125% and 145%. Your tax position, whether you borrow personally or through a company and the type of let all affect it. Your lender’s criteria will confirm which applies.
What if the rent does not support the loan I need?
You can put in a larger deposit, look at a longer fixed rate where the lender uses a lower stress rate, or consider a lender that takes other income into account. A broker can tell you which lenders fit your case.
Is the result a mortgage offer?
No. It is an illustration based on your own figures. A lender will rely on a surveyor’s view of the rent and value, and on its own criteria.
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