Buy-to-Let Mortgage Calculator
See if a buy-to-let stacks up. Enter the property price, deposit, rate and monthly rent — the calculator shows your maximum borrowing from the ICR stress test, the interest-only and repayment monthly cost, gross and net yield, the 5% stamp duty surcharge and your cash-on-cash return, all in one place.
£195,611 max borrowing (ICR)
Your loan: £187,500 (75% LTV) · Passes ICR (151%)
Interest-only: £866/mo · Repayment: £1,156/mo · Gross yield: 6.2% · Net yield: 5.5%
Stamp duty (SDLT): £15,000 · Cash invested: £79,500 · Cash-on-cash ROI: 4.3% (£284/mo)
England & Northern Ireland; SDLT includes the 5% additional-property surcharge. Affordability uses a PRA-style ICR stress test; cash-on-cash is pre-tax on an interest-only basis. Individuals are taxed under Section 24. Rates as of Dec 2025. How we calculate →
How a buy-to-let mortgage works
A buy-to-let (BTL) mortgage is for a property you'll rent out rather than live in. Most are interest-only, so your monthly payment covers just the interest and the full loan is repaid at the end (by selling or refinancing) — that keeps monthly costs low and cashflow higher. You can also take a repayment deal, which costs more each month but clears the loan over the term. This calculator shows both so you can compare.
Lenders typically want a 25% deposit (sometimes more), and they assess the loan against the rent the property will earn rather than your salary — which is where the ICR stress test comes in.
How much you can borrow: the ICR stress test
Buy-to-let affordability is set by the Interest Coverage Ratio (ICR): the rent must cover a multiple of the mortgage interest, calculated at a higher 'stressed' interest rate set by the lender. A common requirement is 125% of interest for basic-rate taxpayers and limited companies, and 145% for higher and additional-rate taxpayers, stress-tested at around 5.5%. Five-year fixed products are usually stressed at a lower rate, so they let you borrow more.
Enter your rent, ICR and stress rate above and the calculator shows your maximum borrowing and whether the loan you want passes the test.
Interest-only vs repayment for landlords
Interest-only keeps monthly payments down and maximises rental cashflow, but you still owe the full balance at the end and need a plan to repay it. Repayment costs more monthly but builds equity and removes that end-of-term risk. Many landlords choose interest-only for cashflow and overpay or sell to clear the capital. The calculator shows the monthly figure for each so you can weigh cashflow against long-term cost.
Rental yield: gross vs net
Gross yield is your annual rent divided by the property price — a quick comparison number. Net yield deducts running costs (management, maintenance, insurance, but not the mortgage) before dividing by the price, so it's closer to reality. A gross yield of 5–8% is typical in much of the UK, with higher yields in the North and lower in London and the South East. Both figures update live above as you change the rent and costs.
Stamp duty on a buy-to-let (the 5% surcharge)
Buy-to-let and second homes pay the standard residential SDLT plus a 5% surcharge on the whole price (raised from 3% on 31 October 2024). In England and Northern Ireland the additional-property rates from April 2025 are 5% up to £125,000, 7% to £250,000, 10% to £925,000, 15% to £1.5m and 17% above — applied band by band. The calculator works out the exact SDLT for your purchase price and includes it in your cash invested.
Return on investment and cash-on-cash
Yield measures return against the property price, but as a landlord you usually only put in the deposit, stamp duty and fees. Cash-on-cash ROI divides your annual net cashflow (rent minus costs and mortgage interest) by the cash you actually invested — the truest measure of how hard your money is working. The calculator shows your cash invested, monthly cashflow and cash-on-cash percentage.
Section 24 and how rental profit is taxed
Since 2020, individual landlords can no longer deduct mortgage interest from rental income; instead you get a 20% basic-rate tax credit on finance costs (the 'Section 24' rules). This means higher and additional-rate landlords pay more tax than the headline cashflow suggests, which is why many now buy through a limited company (SPV), where interest is still fully deductible. This calculator shows pre-tax cashflow; factor in your own tax position, and consider advice on the company-vs-personal decision.
Frequently asked questions
How much can I borrow on a buy-to-let?
It depends mainly on the rent, not your salary. Lenders use an Interest Coverage Ratio (ICR): the rent must cover 125%–145% of the mortgage interest at a stressed rate (around 5.5%). For example, £1,300 a month rent at 145% and a 5.5% stress rate supports roughly £195,000 of borrowing. Enter your figures above to see your maximum.
What is the ICR stress test?
The Interest Coverage Ratio test checks that your rent comfortably covers the mortgage interest at a higher 'stressed' interest rate than you actually pay. Lenders require the rent to be 125% of interest for basic-rate taxpayers and limited companies, or 145% for higher and additional-rate taxpayers, so there's a buffer if rates rise.
Do I pay extra stamp duty on a buy-to-let?
Yes. In England and Northern Ireland buy-to-let and second homes pay a 5% surcharge on top of standard residential SDLT (it rose from 3% on 31 October 2024). On a £250,000 property the additional-property SDLT is £15,000. The calculator works out the exact amount for your price.
Is interest-only better for buy-to-let?
Most landlords use interest-only because it keeps monthly payments low and maximises rental cashflow, but you still owe the full loan at the end of the term and need a repayment plan. Repayment mortgages cost more each month but clear the debt and build equity. The calculator shows both monthly figures.
What is a good rental yield?
A gross yield of around 5–8% is typical across much of the UK, with higher yields in northern cities and lower yields in London and the South East. Net yield, after running costs, gives a more realistic picture. Compare the gross and net yields above for your property.
How much deposit do I need for a buy-to-let?
Most buy-to-let lenders want at least a 25% deposit, so 75% loan-to-value, though some accept less at higher rates. A larger deposit usually means a better rate and helps you pass the ICR affordability test. Adjust the deposit above to see the effect on borrowing and yield.
Researched & verified by the Calcuris Data & Research Team. How we build and check our tools →