Check what a lender will lend on your rental before you make an offer
Buying a rental property comes down to two questions. How much can I borrow, which comes down to how much a lender will advance, and will the rent still pay its way once the mortgage and running costs are out? This calculator answers both. Put in the price, your deposit, the rent you expect and the rate, and it shows the monthly payment, the test a lender will run on the rent, the largest loan that rent supports and the yield you’re left with.
A buy-to-let mortgage, often shortened to BTL, isn’t assessed like a home loan. Your income still gets looked at, but the rent the property will earn usually sets the size of the loan. Running the figures before you offer saves wasted applications and tells you early whether a deal is worth chasing.
Below the calculator you’ll find how the lender’s rent test works, how to work out a yield you can trust, and which limit is most likely to cap your borrowing.
Every figure is an estimate. The stress rate and the 125% and 145% tests are typical lender settings, and you can change the stress rate to match one you’ve been given.
Get a formal quote
Happy with the figures? Open the form below and your results are added to the message box for you. Add your details and anything else we should know, send it, and a specialist will come back with lender options and a formal quote.
How the buy-to-let calculator works
It follows the order an underwriter would. First it sizes the loan from your deposit. Then it works out the payment at the rate you’ll actually pay. Last, it re-tests the rent at a higher stress rate to see whether the loan passes.
The first input is the property value, which is the purchase price, or on a remortgage what it’s worth today. Add your deposit as a percentage and the loan is whatever’s left. Then enter the monthly rent. Lenders don’t take your word for it. They use the valuer’s rental assessment, so base your figure on the rents comparable homes nearby actually achieve.
Running costs are optional. Agent fees, insurance, repairs, voids and safety certificates go in here, and they feed the net yield and the cashflow figures, though not the lender’s test. After that come the rate and the term, and whether you want interest-only or capital and interest. Lenders run their rent test on an interest-only basis whichever you choose.
Two settings can move the answer a long way. One is who’s buying: a basic rate taxpayer, a limited company or a higher rate taxpayer. The other is the stress rate, the rate the lender tests at, which the calculator sets from your fixed period: your rate plus 2 points on a two-year fix, and your pay rate on a five-year fix. You can overwrite it.
What the calculator leaves out
Arrangement, valuation and legal fees, early repayment charges on any loan you’re replacing, and stamp duty all need their own budget. Stamp duty is the big one. In England and Northern Ireland most buy-to-let purchases pay the standard rates plus a 5% surcharge for additional properties. On a £250,000 purchase that’s £2,500 at the standard rates and a further £12,500 for the surcharge, £15,000 in all. Scotland and Wales have their own taxes, and they differ.
The rent test: what really caps your borrowing
A normal repayment calculator works from the rate you type in. A buy-to-let lender goes a step further and checks the rent against the mortgage at a higher rate than you’ll pay. It’s usually that extra test which trims the offer.
It’s called the interest coverage ratio, or ICR. It compares a month’s rent with a month’s mortgage interest, so cover of 125% means the rent brings in £125 for every £100 of interest. Where the bar sits depends on your tax position. Basic rate taxpayers and limited companies are normally tested at 125%. Higher rate taxpayers are usually tested at 145%. The reason is Section 24. Individual landlords only get basic rate relief on mortgage interest, so a higher rate taxpayer hands more of the rent to HMRC and has less cushion for a void or a repair.
The rate used for the test matters just as much. Lenders rarely test at the rate you’ll pay. Most work from a stress rate, often with a floor of around 5.5%, and on shorter fixes some add a margin to the product rate, which can push the figure higher still. Five-year fixes tend to be treated more gently, with many lenders testing close to the pay rate. That’s why a longer fix can unlock a bigger loan.
Here’s how it plays out on a £250,000 flat with a 75% loan of £187,500, interest-only at 5.79% on a five-year fix. That is £905 a month in interest. Many lenders test five-year fixes at the pay rate, so the stress interest is the same £905 a month. To pass at 125% the rent has to reach £1,131, and at 145% it has to reach £1,312.
Say the flat lets for £1,200. Cover comes out at 133%. A basic rate taxpayer or a limited company passes and borrows the full £187,500. A higher rate taxpayer falls short of 145%, and the most that rent supports is about £171,500, or 69% of the value. Their deposit goes from £62,500 to roughly £78,500. The property hasn’t changed, nor has the rent or the lender, yet they borrow about £16,000 less and need £16,000 more in cash at completion.
Choose a two-year fix instead and the calculator tests at 7.79%, so the same flat needs £1,521 of rent for 125% and £1,765 for 145%. A basic repayment calculator never shows you that. Most buy-to-let applications turn on it.
Rental yield: gross, net and after costs
Ask a landlord what a property yields and you’ll nearly always hear the gross figure. That makes the deal look better than it is, because it only divides a year’s rent by the price and stops there. Net yield takes the running costs off first, and that’s the one that tells you what the property pays.
Take a £180,000 terrace let at £1,100 a month. That’s £13,200 a year in rent and a gross yield of 7.33%, the number on the agent’s particulars.
Now count the cost of owning it. Full management at about 10% plus VAT is £1,584. Landlord insurance adds £300, repairs say £1,000, a month’s void £1,100, and gas and electrical safety certificates £150. That comes to £4,134, leaving net income of £9,066 and a net yield of 5.04%. Nothing unusual happened to get there. Ordinary costs took nearly a third of the rent before any of it reached the lender.
Then the mortgage. A 75% loan of £135,000 at 5.79% costs £7,817 a year in interest. The net income covers that with about £1,249 to spare, which is roughly £104 a month, or a 2.8% return on a £45,000 deposit before any rise in value.
That deal works because the yield is strong enough to carry it. At 75% loan to value and rates near today’s, a property needs a gross yield of around 6.3% before the rent pays for the mortgage and the running costs together. Above that line the numbers stack up. Below it you’re relying on a bigger deposit or on the price rising. A lot of stock in expensive areas sits under 6.3%, and plenty of owners only find that out when the first year of accounts comes back.
Which limit binds first
Every buy-to-let loan has two ceilings. One is loan to value, the most a lender will advance against the property. The other is the rent test above. The lower of the two sets your loan, and the yield usually decides which one it is.
The £250,000 flat, at £1,200 rent, gives a gross yield of 5.76%. Loan to value alone allows £187,500, but a higher rate taxpayer is tested at 145% and can only borrow about £171,500, so the rent test sets the limit. There are three ways round it. Put in a bigger deposit, choose a five-year fix that’s tested nearer the pay rate, or buy through a limited company and be tested at 125%.
The £180,000 terrace tells a different story. The same £1,100 rent gives a 7.33% gross yield, and 75% of the price allows £135,000. On a five-year fix, stressed interest on that loan is £651 a month, so cover is 169%. It clears 125% and 145% with room to spare, and on a two-year fix tested at 7.79% cover falls to 125.5%, which only just clears 125%. On rent alone the property could support about £182,000, more than it’s worth, so loan to value is the limit and the rent test never bites.
Work out which ceiling applies before you start viewing. In a pricey area with a thin yield, your tax position and the stress rate shape the deal, and a small change in either can move the loan by tens of thousands. Where the yield is strong, the rent test fades and your deposit is what limits you.
Many landlords buy through a limited company for tax reasons, and the lower 125% test comes along as a by-product. A company adds cost and paperwork, so talk it through with your accountant first. What a broker can do is show you how much more each route lets you borrow.
Typical buy-to-let rates, as at October 2026
Rates have crept up lately. Which? and Moneyfacts put the average fixed buy-to-let rate at 5.79% at the start of October, up from 5.47% in August. The Bank of England held Bank Rate at 3.75% on 17 September, by six votes to three, and the three who dissented wanted a rise, so nobody is expecting rates to drop quickly.
An average hides a wide spread. Lower loan to value gets the best pricing. At 60% to 75% the cheapest five-year fixed rates were in the mid 4% range on 6 October, and 80% deals started in the 5s. Be careful, though. Many of the cheapest deals carry arrangement fees of 3% to 5% of the loan, and on a £187,500 mortgage 3% is £5,625. Compare the total cost over the fixed period rather than the headline rate alone.
Most landlords borrow up to 75% of the value, with a few specialist lenders going to 80%. Terms usually run from 5 to 30 years, and most loans are interest-only. Its rate box is preset to 5.79%, the current average. Type over it with the rate you’ve been quoted.
What lenders check beyond the rent
The rent test is one part of the decision. Experience matters, and first-time landlords may be offered a lower maximum loan to value or a minimum income requirement outside the rent. The property itself is looked at, since standard houses and flats are easy to value and unusual or poorly kept stock narrows the field. Your credit record counts as it does for any borrowing, and so does your existing portfolio if you have one, because larger landlords are asked for more information on their other properties.
Where the calculator stops and a broker starts
A calculator tests one scenario with typical settings. It can’t tell you which lenders will accept your property, how they’ll value the rent, or which stress rate and loan to value they’ll apply to someone with your tax position. We can.
Commercial Finance Network works across the full specialist buy-to-let panel. Before you apply anywhere we’ll tell you what’s realistically on offer for your deal and what it will cost, and we’ll flag any limit that would cut the loan. If you’re buying several properties, see our page on HMO finance, and if you need to complete quickly before refinancing, a bridging loan is the usual route.
Frequently asked questions
How much can I borrow on a buy-to-let?
It depends on the lower of two limits: loan to value, usually up to 75%, and the rent test. Put your figures in the calculator and it shows which limit applies and the largest loan the rent supports. A broker can then tell you what individual lenders would offer.
What's a buy-to-let mortgage calculator?
It’s an online tool that estimates repayments and borrowing on a rental property. This one also runs the rent test lenders use, so you can see the largest loan the rent will support as well as the monthly payment.
How accurate is the calculator?
It’s a reliable guide, not a quote. It applies the standard 125% and 145% tests at a typical stress rate. Each lender sets its own rules, though, and the final offer depends on your credit, your experience as a landlord and the valuation.
What do I need to use it?
The property value, your deposit, the monthly rent, the interest rate and term, and whether you’re buying personally or through a company. Running costs are optional and only change the yield and cashflow figures.
Will it show me why a loan was cut?
Yes. It shows the rent needed to pass the test at your stress rate, and if the rent falls short it works out the reduced loan and the extra deposit you’d need.
Can I use it as a first-time landlord?
Yes, and it’s a sensible way to test a first deal before you commit. Some lenders set a lower maximum loan to value or ask for a minimum personal income from first-time landlords, so check that with a broker once the figures look right.
Does it include stamp duty and fees?
No. It covers the mortgage, the rent test and your running costs. Arrangement, valuation and legal fees and stamp duty sit outside it. Add those separately and ask an adviser to set out the full cost before you go ahead.
Should I buy through a limited company?
Plenty of landlords do. Choose the limited company option in the calculator to see the 125% test. Company mortgages often cost a little more than personal ones and have their own lender criteria, so speak to a specialist before deciding.
Final thoughts
The most useful buy-to-let calculator is the one that shows what a lender will actually do, not only what the monthly payment looks like. This one tests the rent the way lenders do, tells you whether loan to value or the rent test is setting your limit, and shows the yield you’re left with after costs.
Use it to screen deals before you offer, and to compare buying personally with buying through a company. Then speak to a buy-to-let specialist for lender-specific figures.
Commercial Finance Network is a whole-of-market commercial finance broker working with property investors, developers and businesses across the UK and internationally. We are directly authorised and regulated by the Financial Conduct Authority. Buy-to-let mortgages taken out for business purposes are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related pages
- Commercial Mortgage Calculator – Estimate repayments on commercial property borrowing, including mixed-use and investment property.
- Bridging Loan Calculator – Model the monthly interest and total cost of short-term finance.
- Remortgage Commercial Property – Release equity or improve the terms on an existing investment property.
- HMO Mortgage Calculator – Test the rent and the loan on a house in multiple occupation.
- Commercial Mortgages – Lending against commercial and semi-commercial investment property.
