Precision Utility
Buy to Let
Calculator
Min Deposit
25%
ICR Stress
5.5%
Work out whether a buy to let property stacks up financially. Enter the purchase price, deposit, mortgage rate, term and expected monthly rent — the calculator shows your monthly mortgage payment, rental profit or loss, gross yield, return on investment and a stress test at a higher rate. Built for UK landlords and property investors.
Investment Parameters
Monthly Mortgage Payment
£0
Monthly Profit/Loss
£0
Annual Rental Income
£0
Rental Yield
0%
Annual ROI on Deposit
0%
Loan Amount
£0
Stress Test (Rate + 2%)
£0/mo
—How the buy to let calculator works
Enter the property purchase price and your deposit amount. The calculator works out the mortgage loan automatically and uses a standard repayment amortisation formula to determine your monthly mortgage payment.
Your expected monthly rent is then compared against the mortgage payment to show monthly profit or loss. The calculator also works out gross rental yield (annual rent as a percentage of property price) and annual return on investment based on your deposit.
The stress test automatically checks whether the property remains viable if interest rates rise by 2 percentage points above your entered rate. This mirrors the assessment most buy to let lenders carry out before approving a mortgage.
All figures are estimates based on a repayment mortgage. Interest-only buy to let mortgages would have lower monthly payments but leave the full loan outstanding at the end of the term.
What you need to know about buy to let
Buy to let mortgages work differently from residential mortgages. Lenders typically require a minimum 25% deposit and assess affordability based on the property's rental income rather than your personal salary. The Interest Coverage Ratio (ICR) test checks that rental income covers 125-145% of the mortgage payment at a stressed interest rate, usually around 5.5%.
Key considerations for UK buy to let investors:
- Section 24 tax changes: Mortgage interest is no longer a deductible expense. Instead, landlords receive a 20% tax credit — higher-rate taxpayers pay significantly more
- Stamp duty surcharge: An additional 3% SDLT surcharge applies on buy to let purchases if you already own a property. Use our stamp duty calculator with the additional property option
- Landlord insurance: Buildings and landlord liability cover typically costs £200-£400 per year
- Maintenance: Budget roughly 10% of annual rental income for repairs and upkeep
- Void periods: Expect 4-8 weeks per year without a tenant, depending on location and property type
- Letting agent fees: Full management services typically charge 8-12% of monthly rent plus VAT
Buy to let interest rates tend to be higher than residential mortgage rates. As of 2025, typical BTL rates range from 5% to 6.5% depending on LTV, deal type and lender. Always compare rates from multiple lenders or use a specialist buy to let mortgage broker.
Frequently asked questions
What deposit do I need for buy to let?
Most UK buy to let lenders require a minimum 25% deposit, though some specialist lenders accept 20%. A larger deposit typically secures a lower interest rate and improves your rental yield on invested capital.
What is the ICR stress test?
The Interest Coverage Ratio (ICR) stress test checks whether your rental income covers mortgage payments at a higher interest rate, typically 5.5%. Lenders require rental income to be 125-145% of the stressed mortgage payment to approve a buy to let mortgage.
How does Section 24 affect my tax?
Section 24 removed the ability to deduct mortgage interest from rental income before calculating tax. Instead, landlords receive a 20% tax credit on mortgage interest. Higher-rate taxpayers pay significantly more tax on rental profits as a result.
What rental yield should I aim for on a buy to let property?
A gross rental yield of 5-8% is generally considered good for UK buy to let. Yields vary significantly by location — northern cities often deliver higher yields than London and the South East, where capital growth tends to be stronger.
How do I calculate buy to let rental yield?
Gross rental yield is calculated as annual rent divided by the property price, multiplied by 100. For example, £12,000 annual rent on a £200,000 property gives a 6% gross yield. Net yield deducts costs like insurance, maintenance and void periods.
Do I pay extra stamp duty on a buy to let purchase?
Yes. If you already own a residential property, you pay a 3% surcharge on top of the standard SDLT rates when purchasing a buy to let. Use our stamp duty calculator with the additional property option to see the full cost.
What ongoing costs should buy to let landlords budget for?
Budget for landlord insurance (around £200-£400/year), maintenance and repairs (roughly 10% of annual rent), void periods (typically 4-8 weeks per year), letting agent fees (8-12% of rent), gas safety certificates and EPC renewals.