Buy-to-Let Yield & Stress Test Calculator
Before a BTL lender offers a mortgage, they run a yield check and an ICR stress test. Know your gross yield, net yield and maximum loan before you apply - so we can place your case first time.
Run your numbers before you apply
The PRA requires lenders to stress-test BTL mortgages at a notional rate (minimum 5.5%), with rent covering the stressed interest at 125% (basic rate) or 145% (higher rate and most Ltd Co cases).
Illustrative only. Maximum LTV is typically capped at 75-80% regardless of ICR. Lender stress rates and ICR multipliers vary - we know each lender's exact policy and will confirm your real maximum.
Gross yield
Annual rent divided by property value. Most BTL lenders look for a minimum gross yield of 5-6%. HMO and MUFB lenders typically require 6%+.
Net yield
Annual rent less running costs (letting fees, insurance, a 1% maintenance reserve, voids, compliance) divided by value. A more accurate picture of actual return.
ICR stress test
The most important lender calculation. Rent must cover the interest stressed at a notional rate (minimum 5.5%) by 125% or 145%. It sets your maximum loan.
Get placed with the right lender first time
Knowing your numbers avoids surprises. Send us your scenario - property, rent, structure - and we will identify the lender whose stress rate and ICR policy give you the most.
Maximum loan by rent and ICR
Indicative maximum loan (and implied LTV on a £200k property) at a 5.5% stress rate. Asterisked entries would be LTV-capped at 75-80%, not ICR-capped.
| Monthly rent | Max loan at 125% ICR | Max loan at 145% ICR |
|---|---|---|
| £800 | £139,636 (70%) | £120,550 (60%) |
| £1,000 | £174,545 (87%*) | £150,685 (75%) |
| £1,200 | £209,455 (75% cap) | £180,823 (90%*) |
| £1,500 | £261,818 (75% cap) | £226,029 (75% cap) |
| £2,000 | £349,091 (75% cap) | £301,372 (75% cap) |
| £2,500 | £436,364 (75% cap) | £376,715 (75% cap) |
Frequently asked questions
What rental income figure do lenders use?
Most lenders use actual achieved rent from a current tenancy agreement, or projected market rent from a surveyor or RICS-registered letting agent. Some lenders apply a void discount (typically 10-15%) to the projected rent before running the ICR test. For HMOs, lenders typically assess room-by-room rents, not the gross HMO income.
Does the ICR stress rate vary by lender?
Yes. The PRA minimum is 5.5% but lenders can set higher stress rates. Many lenders currently stress at 5.5-6.5%. Our brokers know each lender's exact stress rate - placing with a lender using 5.5% vs 6.5% can mean a difference of 15-20% in maximum loan on the same rental income.
Can I get a BTL mortgage in a limited company?
Yes, and it is increasingly common for portfolio landlords due to Section 24 tax treatment. Ltd Co BTL underwriting varies significantly by lender - some use the same ICR as personal names (125%), others use 145%. We have access to specialist Ltd Co BTL lenders for single properties, portfolios, and complex SPV structures.
What is the maximum LTV on a buy-to-let mortgage?
Most BTL lenders offer up to 75% LTV, with some specialist lenders reaching 80% LTV on standard residential BTL. HMO mortgages are typically capped at 75% LTV on the investment value. Portfolio mortgages can reach 75% LTV on a blended basis across the portfolio.