Calculators
Buy to Let Mortgage Calculator
Buy-to-let borrowing is usually based on expected rental income rather than salary alone. This calculator gives you a starting estimate before you apply.
Whether you’re simply considering a buy-to-let mortgage or looking to expand your existing portfolio, our buy-to-let calculator allows you to check if you’re eligible as well as what sort of figure you can expect from a lender.
Buy-to-let mortgage calculator
Check the loan to value, gross yield and whether the expected rent covers a lender's stress-tested interest.
Buy-to-let lenders usually cap borrowing at 75–80% of the property value.
Lenders test affordability at a higher rate than the one you'd actually pay.
Below the 125% cover most lenders look for — a larger deposit or higher rent would usually be needed.
Estimate only. Most buy-to-let lending is not regulated by the Financial Conduct Authority. Lender rental stress tests, tax position and product fees vary — figures here are for guidance and are not a mortgage offer. Initial advice is free; if you proceed, a fee typically between £199 and £299 may apply and will always be agreed with you before any application.
This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. You should make an appointment to receive mortgage advice which will based on your needs and circumstances.
How much can I borrow?
How much you could borrow for a buy-to-let mortgage depends on certain personal and financial factors. Put these details into the calculator below and we’ll provide you with an indication of your borrowing potential.
This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. You should make an appointment to receive mortgage advice which will based on your needs and circumstances.
What is a buy-to-let mortgage calculator?
Simply put, a buy-to-let calculator is a tool which helps you work out the loan amount you could receive from a lender for a property you want to rent out.
If you’re purchasing a property with the intention of letting it out, it’s important that you know exactly how much your monthly mortgage repayments will cost in addition to how much you can likely afford to borrow. Our buy-to-let mortgage calculator does just this for you.
How do lenders calculate buy-to-let mortgages?
When borrowing for a buy-to-let mortgage, lenders primarily assess your prospective rental income, but some may also take your personal income into account. In general, lenders will want to see your rental income exceed your mortgage repayment total by between 25%-45%.
To offer an example, if you were going to pay £800 on a buy-to-let mortgage each month, your monthly income gained from rent would have to be at least £1,000.
Other significant factors for calculating buy-to-let mortgages include your loan-to-value (LTV) ratio - which is often required to be 75% or lower - alongside your annual income.
How much will my buy-to-let mortgage cost?
The cost of your buy-to-let mortgage will be influenced by three things:
- Deposit size: A larger deposit reduces the borrowed amount. Typically, buy-to-let lenders want around 25% of the property’s value.
- Interest rate: Monthly payments for the majority of buy-to-let mortgages cover only the interest, not the entire capital loan amount.
- Mortgage term: The complete mortgage amount is settled by you at the end of the loan term.
What are the interest rates on buy-to-let mortgages?
Your offered interest rate from a buy-to-let mortgage lender is down to:
- Your LTV ratio: A higher ratio increases the loan's risk and usually leads to a higher interest rate.
- Your credit history: Lower credit scores often result in higher mortgage interest rates due to perceived risk by lenders.
- The current Bank of England (BoE) base rate: Mortgage rates are directly influenced by the BOE’s base rate, market conditions, and lender policies.
- Mortgage type: A fixed-rate mortgage maintains a consistent interest rate, while a variable-rate mortgage (e.g. tracker mortgage) fluctuates over time.
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FAQs
- Why are most buy-to-let mortgages interest only? Most landlords opt for interest-only buy-to-let mortgages because they offer lower monthly payments compared to repayment mortgages. While they often require a larger deposit, the reduced costs make them more manageable, especially as rental income typically covers the mortgage payments in full.
- What happens at the end of an interest-only buy-to-let mortgage? When an interest-only buy-to-let mortgage reaches the end of its term, the borrower must repay the full original loan amount. Upon expiry, the lender will provide a redemption statement detailing the exact sum owed. Repayment can be made using savings, proceeds from selling the property, refinancing, or other financial arrangements.
- What should you consider before getting a buy-to-let mortgage? Before taking out a buy-to-let mortgage, it’s important to understand the financial implications and specific risks involved. One key factor is taxation - rental income is subject to income tax, with rates varying depending on your earnings. Likewise, when you sell the property, you may be liable for capital gains tax (CGT) on any profit made. Lenders also have strict affordability criteria, often needing the expected rental income to be between 125% and 145% of the mortgage repayments. However, rental income is not always guaranteed, as there may be periods when the property is unoccupied. As such, you should have a contingency plan in place to cover mortgage payments during any void periods.
Frequently asked questions
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