BUY TO LET MAXIMUM BORROWING CALCULATOR
Use our buy to let borrowing calculator to estimate how much you could borrow based on the rent a property is expected to earn. Buy to let lending is mainly assessed on rental income rather than your salary. Lenders check that the rent covers the mortgage interest by a set margin, which varies with your tax position and whether you buy personally or through a limited company.
This calculator gives an estimate only. See how we help landlords or check the rent a lender may need.
This calculator is an interactive tool which should be used for your guidance only, and must not form part of your financial decision-making process.
How our buy to let borrowing calculator works
Buy to let lenders mainly look at the rent, not your salary. Our buy to let borrowing calculator uses the same test most lenders use, called the interest coverage ratio (ICR). The expected rent must cover the mortgage interest by a set margin, worked out at a "stress" interest rate that is often higher than the rate you'll actually pay.
125% ICR
Usually used for limited companies and basic rate taxpayers. The rent must be at least 125% of the mortgage interest at the stress rate.
145% ICR
Usually used for higher and additional rate taxpayers buying in their own name. The higher margin means you can borrow less on the same rent.
An example
A flat lets for £1,200 a month (£14,400 a year). Here is what you could borrow with a 5.5% stress rate:
- ✓ At 125% ICR: £14,400 ÷ (1.25 × 5.5%) = about £209,000
- ✓ At 145% ICR: £14,400 ÷ (1.45 × 5.5%) = about £180,000
The same rent gives a difference of nearly £29,000. That is why the way you buy (personally or through a limited company) matters so much.
How to borrow more than the buy to let borrowing calculator shows
- ✓ Five-year fixes: many lenders stress these at the actual pay rate, which can increase borrowing.
- ✓ Top slicing: some lenders let your personal income make up a rent shortfall.
- ✓ Limited company purchase: often assessed at 125%, but the tax side needs advice from an accountant.
- ✓ Bigger deposit: most lenders want 25%, some 20%, and a lower loan to value can open better rates.
Other costs to plan for
Buying an additional property usually means paying a 5% stamp duty surcharge on top of standard rates. Check current figures on GOV.UK stamp duty rates. You'll also need to budget for legal fees, a valuation, any lender fees and letting agent costs.
Want the full picture? Read our buy to let mortgage guide. If you're growing a portfolio, see our property investor mortgage страница.
This calculator gives an estimate only. Lender criteria, stress rates and ICRs vary and change regularly. Most buy to let mortgages are not regulated by the Financial Conduct Authority.