Estimate your buy-to-let borrowing potential based on expected rental income and lender stress-test rates.
What the property is likely to let for each month
How much you're putting down
Higher and additional rate taxpayers are usually stress-tested at a higher rental cover ratio
Most buy-to-let lenders cap borrowing at 75% LTV
The notional rate lenders use to test rent covers the mortgage, regardless of your actual pay rate
Maximum borrowing
£150,000
Limited by loan-to-value
This result is an estimate only and does not constitute financial advice.
Maximum property price
£200,000
This result is an estimate only and does not constitute financial advice.
Rental cover required
25%
Rent must exceed the stressed mortgage interest by this much
This result is an estimate only and does not constitute financial advice.
Stressed monthly interest
£687.50
Interest-only payment on the maximum loan at 5.5%
This result is an estimate only and does not constitute financial advice.
Buy-to-let mortgages aren't usually assessed against your personal income the way a residential mortgage is. Instead, most lenders size the loan around the property's own rental income, checking that the rent would comfortably cover the mortgage interest even if rates rose.
They do this with a rental cover ratio, often called an Interest Coverage Ratio (ICR), applied to a stress-tested interest rate rather than your actual pay rate. A lender might require the rent to reach 125% of the interest payment for a basic-rate taxpayer, rising to 145% for higher and additional-rate taxpayers, calculated at a notional rate such as 5.5% regardless of the deal you're actually offered.
Your borrowing is then capped by whichever is lower: the amount the rental income supports, or the amount your deposit supports at the lender's maximum loan-to-value, typically 75% for buy-to-let. A strong rental yield doesn't help if your deposit can't stretch to match it, and vice versa.
Use the calculator above to see which of the two is holding back your borrowing, and experiment with different deposits, rents and stress rates to see how they shift your maximum loan.
Buy-to-let lending is treated as a business decision rather than a residential purchase, so most lenders size the loan around whether the property's own rental income can cover the mortgage. Your personal income may still be checked as a minimum eligibility requirement, but it usually isn't what determines how much you can borrow.
The Interest Coverage Ratio (ICR) is the minimum percentage by which your rental income must exceed the mortgage interest payment. A lender requiring 145% cover wants the monthly rent to be at least 1.45 times the interest payment, giving a buffer for costs, voids and rate rises.
Lenders want to be confident the rent would still cover the mortgage even if rates increased after you take out the loan. They apply the rental cover ratio to a notional stress rate, often around 5.5%, rather than the actual pay rate on the deal, which usually means you can borrow less than the headline rate alone would suggest.
Since mortgage interest relief for landlords was restricted under Section 24, higher and additional-rate taxpayers keep less of their rental profit after tax. Lenders account for this by requiring a higher ICR, typically 145% rather than 125%, to make sure the rent still comfortably covers the mortgage after the borrower's own tax position is factored in.
Compare buy-to-let mortgage deals from lenders who assess rental income the way this calculator does.