Buy-to-Let Mortgage Calculator
Model a buy-to-let mortgage on interest-only or repayment terms, work out the gross yield and monthly cash flow, and run the lender's ICR stress test to see if your rent passes.
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ICR threshold for basic-rate taxpayer: 125%. The stress test checks whether rent covers 125% of interest at the stress rate of 5.5%.
An estimate only. Actual lending depends on the lender's criteria, stress rate, tax position and the rental assessment.
How the ICR test works
Buy-to-let lenders size the loan against rental income using the Interest Coverage Ratio (ICR). They divide the annual rent by the annual mortgage interest, usually calculated at a higher stress rate rather than the pay rate, and check it clears their minimum threshold. Most lenders apply 125% for basic-rate taxpayers and limited company (SPV) borrowers, and 145% for higher-rate taxpayers and many portfolio landlords.
Interest-only is the standard structure for buy-to-let, which keeps the monthly cost down and the rental cover high, with the capital repaid on sale or refinance. If your rent passes the stress test, the loan is affordable on the lender's terms. If it falls short, you may need a lower loan, a higher rent, or a lender with a product fee that reduces the stress rate.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR PROPERTY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY. This information is for general guidance only and does not constitute financial advice or a mortgage offer. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Doulton Bridging Finance is a trading style of Doulton Money Ltd. We work with FCA-authorised partners to source mortgage finance from a panel of specialist lenders.