Buy to let mortgage calculator

A buy-to-let mortgage calculator estimates your monthly repayments, total interest costs and potential rental yield based on the figures you enter. Unlike a standard mortgage affordability calculator, it focuses on rental income rather than your personal salary because most buy-to-let lenders assess affordability through the rent the property generates.

You enter the property value, your deposit amount, the interest rate, mortgage term and expected monthly rent. The calculator then shows your monthly payment on either an interest-only or capital repayment basis, the total cost over the full term and the gross rental yield as a percentage.

Most buy-to-let mortgages in the UK are taken on an interest-only basis. This means your monthly payments cover just the interest, not the loan itself. On a £200,000 mortgage at 5.5%, interest-only payments would be approximately £917 per month compared to £1,228 on a repayment basis. The trade-off is that you still owe the full £200,000 at the end of the term and need a repayment strategy in place.

Calculator results are estimates. Your actual rate depends on your credit history, the property type, whether you are buying personally or through a limited company, and the lender's individual criteria. Use the figures as a starting point, then speak with a specialist broker for an accurate quote.

Before running your calculation, gather these key numbers. Getting accurate inputs makes the difference between a useful estimate and a misleading one.

• Property value or purchase price: Use recent sold prices on your street from the Land Registry or Rightmove to check comparable values.
• Deposit amount: Most buy-to-let lenders require a minimum 25% deposit. A £250,000 property means putting down at least £62,500. Check our guide on buy-to-let deposits for more detail.
• Expected monthly rent: Research local rental values using Rightmove, Zoopla or a local letting agent's appraisal. Be realistic rather than optimistic.
• Interest rate: Check current buy-to-let mortgage rates for your deposit level. Rates in mid-2026 range from around 4.5% for 60% LTV to 6.5% for 75% LTV.
• Mortgage term: Typically 25 years, though terms of 15 to 35 years are available.
• Repayment type: Interest-only or capital repayment.

The table above assumes a £200,000 property. Note that the 75% LTV row borrows less (£150,000) than the 60% LTV row (£120,000 on a cheaper property is not shown). When comparing, always match loan amounts to make a fair comparison. A broker can run precise calculations across multiple lenders for your specific situation.

Rental yield is the annual return you earn from rent as a percentage of the property's value. It is the single most important metric for assessing whether a buy-to-let investment stacks up financially. You can explore this in more detail with a dedicated rental yield calculator.

Gross rental yield is the simplest calculation: annual rent divided by property value, multiplied by 100. A property worth £250,000 generating £1,200 per month in rent produces a gross yield of 5.76% (£14,400 / £250,000 x 100).

Net rental yield deducts running costs before calculating. These costs typically include mortgage payments, letting agent fees (8-12% of rent), insurance (£150-£400 per year), maintenance (budget 10-15% of rent), void periods (typically 4-8 weeks per year) and ground rent or service charges for leasehold properties.

This example highlights why running accurate calculations matters before committing. A 5.76% gross yield looks healthy, but once you deduct realistic costs, this particular scenario barely breaks even. Investors often target a minimum gross yield of 6-7% to ensure the numbers work after expenses. Location, property type and management approach all influence achievable yields.

Stress testing is how lenders check whether your rental income can still cover the mortgage if interest rates rise. Even if today's rate is 5%, lenders typically stress test at 5.5% or higher. This is one of the most important concepts to understand before using a buy-to-let calculator because it directly determines how much you can borrow.

The standard stress test requires monthly rent to cover between 125% and 145% of the mortgage payment at the stressed rate. The exact percentage depends on your tax position:

• Basic-rate taxpayer: Rent must cover 125% of payments at a 5.5% stress rate
• Higher-rate taxpayer: Rent must cover 145% of payments at a 5.5% stress rate
• Limited company purchase: Rent must cover 125% of payments, often at a lower stress rate of around 5%

This is one reason buying through a limited company has become more popular. The lower stress test criteria and more favourable tax treatment mean you can often borrow more for the same rental income.

The difference is significant. A higher-rate taxpayer can borrow roughly £50,000 less than a limited company buyer from the same rental income. If you are considering a property at the upper end of your borrowing capacity, this distinction could determine whether your application is approved. A specialist broker can run stress test calculations across different lenders, as criteria vary.

Around 85% of buy-to-let mortgages in the UK are taken on an interest-only basis. This keeps monthly costs lower and maximises rental cash flow, but it means the full loan balance remains at the end of the term. You need a credible repayment strategy, and lenders will ask about this during your application.

Common repayment strategies include selling the property to clear the mortgage, using savings or investments built up over the term, remortgaging onto a new deal (though this depends on future lending criteria and property values), or switching to a repayment mortgage part-way through the term.

Interest-only saves £232 per month but costs £80,351 more in total interest over 25 years, and you still owe the original £150,000. Repayment costs more each month but builds equity and costs less overall. Many landlords choose interest-only to maximise monthly cash flow and rely on property price growth plus future sale proceeds to clear the loan. This strategy carries more risk if property values fall or you need to sell at an unfavourable time.

Your mortgage payment is only part of the total cost. A thorough buy-to-let calculation includes all the expenses below. Missing these is the most common reason new landlords find their investment underperforms.

Stamp duty is a significant upfront cost for buy-to-let purchases. Since April 2025, the additional property surcharge is 5% on top of standard rates. On a £250,000 property, this means paying £10,000 in stamp duty alone. Factor in buy-to-let tax obligations including income tax on rental profits and the Section 24 restriction on mortgage interest relief, which limits personal landlords to a 20% tax credit rather than full deduction against rental income.

Void periods are another cost new landlords often underestimate. Budget for at least one month per year without a tenant. During voids you still pay the mortgage, insurance and any service charges. Building a cash reserve of 3-6 months' mortgage payments provides a buffer against unexpected vacancies or repairs.