Buy to Let Mortgage Calculator

At Property Store, we provide a free and accurate Buy to Let Mortgage Calculator that helps landlords evaluate borrowing limits, rental yield, and monthly profit. This calculator considers interest-only mortgages, rental income coverage ratio (ICR), and stress‑testing criteria used by UK lenders. It lets you input property price, deposit, interest rate, expected rent, and term to get clear results on repayments, profit, and yield. This tool supports both new and experienced landlords in making informed investment decisions.

Understand Your Rental Income Potential

Calculating your rental income and yield is essential for success with a buy‑to‑let investment. The rental yield calculator built into our platform helps landlords gauge whether a property meets typical thresholds such as 5%–7% gross yield in the UK. You simply enter your expected monthly rent and property price. Our system then shows your annual rental income, yield percentage, and estimated monthly profit after mortgage costs. This helps landlords pricing property competitively while maintaining good income coverage. Whether you operate a standard single-unit buy to let, HMO, or limited company BTL, understanding income potential ensures your portfolio remains sustainable.

What is a good rental yield in your area?

Rental yields vary by region. In London and prime southern towns, gross yield around 4%–5% may be reasonable due to high capital values. In northern cities or regional towns, yields of 6%–7% or more are typical. Property Store uses real‑world data to benchmark average yields by postcode or city so you can compare your deal to recent similar investments. This insight helps you set rent at levels that appeal to tenants while satisfying lender expectations for ICR.

How to calculate monthly rental profit

Monthly rental profit is calculated as: expected rent minus monthly mortgage payment (interest-only). For example, if rent is £1,200 and the monthly payment at the current lender rate is £800, your profit is £400. At Property Store, the calculator displays this figure alongside the income coverage ratio, often required at 125% ICR by lenders. This allows you to assess whether your rent projection supports mortgage borrowing and cashflow needs.

Should you increase the rent? Factors to consider

If the yield or monthly profit is low, you might consider charging more rent. But you also must factor in local market rates, tenant demand, and affordability. At Property Store, our guide helps you research local comparable rents, adjust for property conditions, and assess tenant turnover effects. Increasing rent may improve your borrowing capacity or yield, but it must remain realistic to ensure consistent occupancy and avoid void periods.

How Much Can You Borrow on a Buy to Let Mortgage?

Understanding borrowing limits is vital for investment planning. Our calculator estimates your buy-to-let affordability based on loan-to-value (LTV), rental income, interest rate stress testing, and lender criteria. Most UK lenders allow up to 65%–75% LTV for standard landlords and sometimes up to 80% for limited companies, depending on rental yield. We factor in the lender’s required income multiple or ICR, typically requiring rental income to cover mortgage payments by 125% at a stressed rate (often rate +2–3%).

Loan to Value (LTV) Rules for Landlords

LTV determines how much deposit you need. For example, if you want to borrow 70% on a £300,000 property, the deposit would be £90,000. In the UK, LTV limits vary: high‑yield properties or specialist HMOs often attract lower maximum LTV, while limited company BTL may secure higher LTV with stronger rental contracts. Property Store’s calculator inputs let you test different deposit amounts and see how borrowing capacity changes.

Stress Testing: What Lenders Check

Lenders carry out stress testing to ensure interest rates can rise without causing default. They typically assess your ability to meet mortgage payments if the rate increases by 2%–3%. Our affordability modelling shows you the actual rate used, the monthly payment under stress scenarios, and whether rental income still covers it. This helps ensure you’re prepared for interest rate volatility and comply with lender checks.

Impact of Rental Income on Borrowing Limit

Rental income plays a dual role: it helps determine ICR and debt servicing capacity. If your expected rent is high relative to the mortgage cost, you may borrow more while keeping the income coverage ratio acceptable. For example, if the monthly rent is £1,500 and the monthly cost under the stress rate is £1,000, your ICR is 150%, giving strong affordability. Property Store calculates this ratio and shows any gap if the rental yield or rent is insufficient.

Can I Borrow More with Higher Rent?

Yes, projecting higher rent may improve your borrowing limit if the rent is supported by local comparables. Our calculator lets you gradually adjust rent value to see how each increase affects borrowing capacity, ICR, yield, and monthly profit. This helps you decide whether to invest in minor upgrades or target a different market to boost expected income and borrowing power.

Use the Buy to Let Mortgage Calculator Below

Welcome to the interactive section on Property Store. Here, you can perform live calculations using our embedded Buy to Let Mortgage Calculator.

Enter Your Property Details

Fill in:

• Property price (£)
   

• Deposit amount or percentage
   

• Interest rate (%)
   

• Loan term (years)
   

• Expected monthly rent (£)
   

View Monthly Payments, Rental Profit & Yield

After submission, the results section displays:

• Loan amount borrowed
   

• Monthly mortgage payment (interest-only)
   

• Estimated monthly profit (rent minus payment)
   

• Gross annual rental yield (%)
   

• Income coverage ratio and stress-tested monthly cost.
   

Print, Save or Compare Results

You can print the results using the “Print” button. For comparison, input different scenarios such as varying deposit size, rent, or interest rates to see how outcomes change. This feature enables strategic decisions about deposit, rent setting, and mortgage choice.

Buy to Let Mortgage Calculator FAQs

Is this calculator suitable for interest-only mortgages?

Yes. The Property Store calculator operates on an interest-only basis by default, as many buy‑to‑let mortgages in the UK are interest-only. This format gives a clear view of cash flow and rental profit without capital repayment assumptions.

Can it be used for limited company BTLs?

Absolutely. For limited company landlords, our calculator supports higher LTV and rental income stress scenarios common in corporate BTL lending. You can use the tool to estimate borrowing based on rental agreements under a company structure, though we always recommend confirming with your mortgage adviser or broker.

Does this calculator work for HMOs or multi-units?

Yes. You can enter total rent across all units in a multi-unit property or HMO. The calculator then computes total rental income, yield, and profit. However, HMO lending rules may differ on LTV and stress testing, so consulting a specialist HMO lender or adviser is best.

Expert Tips for New and Experienced Landlords

Common Mistakes to Avoid in BTL Planning

Many landlords underestimate repair costs, overestimate rent potential, or ignore void periods. Use Property Store’s resources to assess local tenancy demand, factor in maintenance, insurance, voids, and account for regulatory changes in EPC or licensing obligations.

When to Switch to a Repayment Mortgage

While interest-only gives better short-term cash flow, you eventually need to repay capital. If you plan to sell in 5–10 years or want equity build-up, switching to a repayment mortgage may suit you. Our calculator can’t model repayment schedules directly, but you can estimatethe  monthly repayment cost using a version with capital included.

Should You Remortgage to Release Equity?

If your property has increased in value, you may remortgage to release equity for new investments. Before doing so, confirm current rental yield and ensure the additional borrowing still meets lender ICR thresholds. Property Store provides updated market data on average values and rents to support your decision.

Disclaimer & Important Notes

This tool is for estimation only. It does not guarantee lending outcomes, rates, or actual rental income. Lender-specific criteria, credit history, and property-specific factors may impact results. Always consult a qualified mortgage adviser or financial planner before making acquisition or refinancing decisions. Property Store is not a lender and does not offer personal mortgage advice. Use this calculator as a helpful guide, not as a substitute for professional advice.