Work out whether your expected rental income passes a lender's buy-to-let affordability stress test. Enter the purchase price, your deposit, the monthly rent you expect to achieve, your actual mortgage rate, the lender's stress-test rate and the Interest Coverage Ratio (ICR) they require, and this calculator shows you the maximum loan the rent can support, the loan you actually need, whether the rental cover test passes or fails, and your interest-only monthly payment at the real rate.
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You are checking whether the expected rent on a buy-to-let property supports the loan you need, under the lender's rental cover (Interest Coverage Ratio) affordability test.
The calculator works out the maximum loan your rent can support using the standard industry formula: (monthly rent × 12 ÷ ICR required) ÷ stress-test rate. It then compares that to the loan you actually need (purchase price minus deposit) to show a pass or fail result, and separately works out your real monthly interest-only payment using your actual mortgage rate rather than the stress rate.
Your calculation summary will appear here once you enter your figures above.
This calculator provides an illustrative estimate only, using a simplified version of the rental cover (ICR) test. Lenders use their own stress rates, ICR thresholds, minimum income requirements and underwriting rules, which vary by lender, product, borrower tax status and property type. Always confirm affordability with a mortgage broker or lender before proceeding, and take independent financial and tax advice.
A buy-to-let mortgage is a loan specifically designed for buying a property you intend to rent out to tenants, rather than live in yourself. Because the loan is being used for an investment rather than a home, BTL mortgages are regulated and assessed very differently from an ordinary residential mortgage — lenders are mainly interested in whether the rental income the property can achieve covers the mortgage, not just your personal salary.
A residential mortgage is assessed mainly on your personal income, outgoings and credit history, and is almost always a repayment loan where you pay down the capital over the term. A buy-to-let mortgage is usually arranged on an interest-only basis, and affordability is driven primarily by the rental income the property can generate rather than your salary — lenders run a rental cover (ICR) stress test on the expected rent instead of (or in addition to) a standard income affordability check. Use the Rental Yield Calculator to check how that same rent performs as a standalone investment return, separate from the mortgage affordability test.
Most mainstream buy-to-let lenders require a minimum deposit of 25% of the purchase price (a maximum 75% loan-to-value). Some will lend at 80% LTV (20% deposit) for very strong applications, while higher-risk property types — houses in multiple occupation (HMOs), new-build flats, holiday lets, or portfolio landlords with many properties — can require 35-40% deposits. A larger deposit reduces the loan needed, improves the interest rate on offer, and makes it considerably easier to pass the rental cover test.
The ICR, or rental cover test, is the calculation lenders use to check that the rent comfortably exceeds the mortgage interest — not just matches it. Rather than using today's actual interest rate, lenders apply a higher "stress rate" (commonly 5.5% or above) to the loan, to make sure the rent would still cover the interest if rates rose sharply or your current deal ended. The rent must then equal at least the required ICR percentage (typically 125%-145%) of that stressed interest figure.
125% ICR is generally applied to basic-rate taxpayers and to purchases made through a limited company, because neither is affected by the Section 24 mortgage interest relief restriction in the same way. 145% ICR is the standard requirement for individual higher and additional-rate taxpayers, reflecting the fact that Section 24 limits the tax relief they can claim on mortgage interest, leaving less after-tax rental surplus to cover the loan.
Buy-to-let mortgage rates and arrangement fees are typically higher than equivalent residential mortgage rates, reflecting the higher risk lenders attach to investment lending (no owner-occupier protections, reliance on tenant-paid rent, and exposure to void periods). Product fees of 1.5%-3% of the loan amount are common on BTL deals, on top of the usual valuation and legal costs, so it's important to factor these into your overall return, not just the headline interest rate.
Most landlords choose interest-only, which keeps monthly payments lower and maximises cash flow, with the capital balance repaid later from sale proceeds or refinancing. A repayment (capital and interest) BTL mortgage gradually pays down the loan and builds equity automatically, but at a significantly higher monthly cost, which can make it harder to pass the ICR test in the first place since lenders typically still stress-test using the (higher) repayment-style calculation unless the loan is genuinely interest-only.
Since Section 24 of the Finance Act 2015 was fully phased in, individual landlords can no longer deduct mortgage interest as an expense before calculating their taxable rental profit. Instead, they receive a flat 20% tax credit on finance costs. This can significantly reduce real-world after-tax profitability for higher-rate taxpayers — and is a major reason why lenders set a higher 145% ICR requirement for individuals compared with limited companies. Use the dedicated Section 24 Landlord Tax Calculator on this site to see exactly how this affects your own tax position.
Many landlords now buy through a limited company (sometimes called an SPV, or special purpose vehicle) specifically to avoid the Section 24 restriction — mortgage interest is deducted as a normal expense before Corporation Tax, and lenders typically apply the lower 125% ICR. The trade-offs include generally higher mortgage rates and fees for company lending, the extra cost and complexity of running a company, additional tax when extracting profit as dividends or salary, and losing access to personal Capital Gains Tax and other individual reliefs on eventual sale. Whether this makes sense depends heavily on your tax bracket, portfolio size and time horizon — take professional tax advice before restructuring.
Buying a buy-to-let property in England or Northern Ireland means paying the higher rates for additional dwellings on top of standard Stamp Duty Land Tax (SDLT) — currently a 5% surcharge applied to the whole purchase price above £40,000, on top of the usual residential bands. This can add a substantial amount to your upfront costs and should be budgeted for separately from the deposit. Use the main Stamp Duty Calculator (SDLT) on this site to work out the exact SDLT and additional-property surcharge due on your purchase.
A landlord is buying a flat for £250,000 with a 25% deposit (£62,500), leaving a loan required of £187,500. They expect rent of £1,200 a month (£14,400 a year). Their lender stress-tests at 5.5% with a 145% ICR requirement (the landlord is a higher-rate taxpayer buying personally): maximum loan supported by rent = (£14,400 ÷ 1.45) ÷ 0.055 = approximately £180,564. Because the £187,500 loan required is higher than the £180,564 the rent can support, this purchase would fail the lender's rental cover test — the landlord would need a bigger deposit, higher rent, or a lower ICR requirement (for example, buying through a limited company) to qualify at this loan size.
Beyond the deposit and monthly interest payment, buy-to-let ownership carries ongoing costs that affect real affordability: letting agent fees (typically 8%-15% of rent if fully managed), landlord insurance, gas safety and electrical safety certificates, EPC compliance, ground rent and service charges on leasehold flats, maintenance and repairs, and void periods where no rent is coming in at all. A healthy rental cover test result on paper doesn't guarantee a profitable investment once these costs are included.
Most BTL mortgages are taken on a fixed-rate deal for 2-5 years, after which landlords typically remortgage rather than let the loan revert to the lender's standard variable rate. The same ICR stress test applies on remortgage, assessed against the loan balance and the rent being achieved at that time — rising interest rates or falling rent can mean a property that passed the test when it was bought no longer supports the same loan size at remortgage. See the dedicated Remortgage Calculator on this site for a full comparison of your options.
As a rough guide, at a 5.5% stress rate and 145% ICR, you typically need monthly rent of around 7.9% of the loan amount per year (rent ÷ loan ≈ stress rate × ICR), or roughly £660 a month for every £100,000 borrowed. At a 125% ICR the figure drops to around £570 a month per £100,000 borrowed. These are illustrative only — always use the calculator above with your own lender's actual stress rate and ICR requirement.
For authoritative, up-to-date guidance that goes beyond this calculator's illustrative estimate, see the following official sources:
Explore these related tools on this site to build a fuller picture of a buy-to-let purchase: