Buy-to-Let Mortgage Calculator: How Much Can You Borrow on a Rental Property?
Rent is what decides a buy-to-let mortgage. This guide explains the loan, the payments, the yield and the interest cover test in plain terms.
What is the Buy-to-Let Mortgage Calculator?
A buy-to-let mortgage is judged mainly on the rent, not just your salary. Lenders compare the monthly rent with the monthly interest, and they usually stress-test that comparison at a rate higher than the one you actually pay, demanding a minimum interest cover ratio. This calculator shows the loan and loan-to-value from your price and deposit, the repayment and interest-only payments, the gross rental yield, and the interest cover ratio at both the product rate and the stressed rate you enter, plus the maximum loan the stressed test would support at your chosen minimum ratio. All figures assume one fixed rate for the whole term and ignore tax, fees, maintenance and empty periods, so treat them as estimates and check the current rules with a qualified mortgage adviser.
How to use it
- Enter the property price and the deposit you plan to put down; the loan is the difference.
- Enter the interest rate and term. The repayment figure assumes that rate stays fixed for the whole term.
- Enter the expected monthly rent, plus the stressed rate and minimum interest cover ratio your lender test should use.
- Click Calculate Buy-to-Let Figures to see the loan, both payments, yield and cover ratios.
Worked example
A £250,000 property with a £62,500 deposit gives a £187,500 loan at 75% loan-to-value. At 5.5% over 25 years the repayment payment is about £1,151 a month and the interest-only payment about £859 a month; £1,250 of rent gives a 6.00% gross yield and an interest cover ratio of about 1.45x at the product rate.
What is the interest cover ratio?
The monthly rent divided by the monthly interest payment. At the product rate, £1,250 of rent over about £859 of interest gives about 1.45x. Lenders then repeat the test at a higher stressed rate and require the result to clear their minimum, often around 1.25x to 1.45x, so the maximum loan the stressed test supports is the annual rent divided by the stressed rate times the minimum ratio.
Frequently asked questions
What deposit do buy-to-let lenders usually want?
It varies by lender and property, but 25% is a common minimum, which caps the loan at 75% of the price. Some lenders accept smaller deposits for lower-risk cases.
Is rental yield the same as profit?
No. Gross yield is annual rent divided by price and ignores mortgage payments, tax, maintenance, letting fees and empty periods, so the real return is lower.