Buy to let mortgage calculator
Enter the rent, the property value and the loan you want. The calculator shows your rental cover, the most the rent could let you borrow, your gross rental yield and what the interest could cost each month. It is a quick estimate. For real figures based on your circumstances, talk to one of our advisers.
How the calculator works
Rental cover
Rental cover is the yearly rent divided by the yearly interest at the lender's test rate. For example, rent of £1,200 a month is £14,400 a year. On a £150,000 loan at a 5.5% test rate, the yearly interest is £8,250, so the rent covers it about 175%. If the lender asks for 125%, that loan passes.
Why the test rate matters
Lenders test the rent against a rate that is often higher than the one you will pay, so that the rent still covers the interest if rates rise. The test rate and the margin differ between lenders, so use the boxes to try different figures.
Gross rental yield
Yield is the yearly rent divided by the property value: £14,400 on a £250,000 property is about 5.8%. It is a quick way to compare properties, but it is not your profit, because it leaves out interest, fees, repairs, insurance, empty periods and tax.
What else lenders look at
Rent is only part of it. Lenders also look at your deposit, your income and credit history, any property you already own, the type and condition of the property, and whether you buy in your own name or through a limited company. If it is your first rental, tell us early, because some lenders have extra requirements.
Stamp duty on a buy to let
Buying an additional residential property usually means higher stamp duty rates. Try our stamp duty calculator and choose the additional property option.
Questions about buy to let calculators
What is rental cover on a buy to let mortgage?
Rental cover, also called interest cover, compares the yearly rent with the yearly interest on the loan. Lenders work the interest out at their own test rate, which is often higher than the rate you will pay, and want the rent to exceed it by a set margin. The calculator shows your cover and the largest loan the rent could support.
What rental cover do lenders ask for?
Margins such as 125% and 145% are common, and which one applies often depends on whether you borrow personally or through a limited company and on your tax position. Each lender sets its own, so we check them against your case.
How much deposit do I need for a buy to let?
A buy to let usually needs a bigger deposit than a home you will live in. The amount depends on the lender, the property and your circumstances, and a bigger deposit can widen your choice. We can tell you which lenders on our panel would consider your case.
Is gross rental yield the same as profit?
No. Gross yield is the yearly rent divided by the property value. It ignores mortgage interest, agent fees, repairs, insurance, empty periods and tax, so your real return will be lower.
Can I buy through a limited company?
Some landlords hold property in a limited company and some in their own name. The choice affects tax and which lenders you can use. Tax is a matter for your accountant, and we can explain how each option affects the mortgage.
Is this calculator a quote?
No. It gives an estimate from the figures you enter and is not an offer of finance or advice. Lenders set their own rates, fees and criteria. For figures based on your own circumstances, call 01279 909750 or use the contact page.
Buy to let advice near you
Read about our buy to let mortgages, or see how we help landlords in Chelmsford, Colchester, Brentwood, Basildon, Harlow and London. You can also use our other mortgage and stamp duty calculators.
Ready to talk it through? Speak to one of our advisers or call 01279 909750.