Buy-to-Let Mortgage Calculator
Mortgage
Loan amount
£187,500
LTV
75.00%
Monthly (interest only)
£859
Lender Stress Test (Higher / additional rate (145%))
Likely to fail
Required annual rent: £20,391 · Your annual rent: £15,600 · Coverage ratio: 111% vs required 145%.
Rent would need to rise by approximately £399/month, or the loan principal would need to fall, to clear the lender's ICR. Limited-company landlords often qualify at the lower 125 % tier.
Estimates only. Lenders apply their own ICR tiers and stress rates which vary by product (5-year fixes typically use the pay rate + 1 %); always check the lender's own affordability calculator before applying.
What is the Buy-to-Let Mortgage Calculator?
A buy-to-let (BTL) mortgage is a loan secured against a UK rental property. Most BTL mortgages are interest-only at the pay rate, but lenders underwrite affordability against an interest coverage ratio (ICR) — typically 125% for basic-rate / Ltd-co. landlords, 145% for higher-rate, and 165% for HMOs and portfolios — at a stress rate of around 5.5–7.5%.
Last reviewed: against HMRC rates for 2024/25 & 2025/26.
Typical BTL ICR stress thresholds (PRA-aligned)
Worked example
On a £200,000 BTL loan at a 5.5% pay rate, monthly interest-only is ~£917. Stress-tested at 7.5% interest-only, the lender requires £15,000/yr rent at 100% ICR, £18,750 at 125%, £21,750 at 145%.
Frequently asked questions
+What is ICR on a buy-to-let mortgage?
Interest Coverage Ratio: the multiple of stressed interest the rent must cover. Most lenders demand 125% for basic-rate / Ltd-co. landlords, 145% for higher-rate individuals, and 165% for HMOs or portfolio cases (≥4 properties).
+Can I get a buy-to-let mortgage as a first-time buyer?
It's possible but limited — most BTL lenders want existing residential mortgage history. Specialist lenders accept FTBs but typically charge higher rates and require a 25%+ deposit and personal income of £25,000+.
+Should I buy through a limited company?
Often more tax-efficient for higher-rate landlords because companies still deduct mortgage interest in full and pay only Corporation Tax (19–25%). The trade-off is higher BTL mortgage rates and double tax on extracted profit (CT then dividend tax).
+What deposit do I need for a buy-to-let?
Typically 25% minimum (75% LTV). Better rates appear at 60% LTV (40% deposit). Limited-company BTL mortgages occasionally need 30%+.
+Why does the lender stress at a higher rate than I'm paying?
PRA underwriting rules require lenders to test affordability at the higher of pay rate + 2% or a fixed 5.5% floor — to make sure the rent still covers the mortgage if rates rise during the fixed-rate period.