Buy to Let Affordability Calculator

250,000 property, 1,300 monthly rent, 75% LTV (187,500 loan) at 5.5% stress-tested to 7%: monthly interest 1,094, ICR 119%. BTL lenders typically require 125% ICR at 5.5-7% stressed rate. Below: unaffordable, above: lendable.

Run it with sensible defaults

Using example values of property price 250,000, monthly rent 1,300, LTV 75%, and stress rate 7%, the calculation works out to 118.86%. These are a starting point for exploring the model, not a recommendation.

The levers in this calculation

The inputs — Property Price, Monthly Rent, LTV, Stress Rate, and ICR Required — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

How the math works

Standard BTL ICR calculation.

Stress-testing the plan

The stress rate is the lever here. Setting it a couple of percentage points above the current rate shows how the cover ratio holds up if a fix resets to a pricier product at renewal, rather than only at today's rate. A deal that clears the threshold now but fails at a higher stress rate is closer to the edge than it looks.

Related calculations worth running

Plans get firmer when you triangulate. Alongside this one, the rental yield calculator, the mortgage calculator, and the mortgage affordability calculator tend to come up in the same conversations. Running two or three together exposes inconsistencies in any single assumption — which is usually where the useful insight lives.

Worked example

Suppose you are evaluating a residential property valued at 300,000. You expect to let it for 1,500 per month. Your lender offers a loan at 80% LTV (240,000 borrowed). The current rate is 5%, but the lender will stress-test at 7.5%. Your lender requires a minimum ICR of 130%.

Enter these figures into the calculator:

• Property Price: 300,000
• Monthly Rent: 1,500
• LTV: 80%
• Stress Rate: 7.5%
• ICR Required: 130%

The calculator shows monthly interest at the stressed rate of 1,500, and an interest cover ratio of 100%. Since this falls short of the 130% threshold, the loan application would not meet the lender's affordability criteria on this scenario alone.

When this calculation matters

This metric appears most often when a lender is assessing a buy-to-let mortgage application. Residential landlords planning to purchase a second property or portfolio investors expanding holdings use it to model whether a property's rental income can service the debt under stress conditions. Property managers evaluating portfolio additions also run similar numbers to understand which properties carry stronger cashflow cushions. It is equally useful for existing owners facing an upcoming rate reset or remortgage decision.

What the result shows and does not show

The interest cover ratio indicates the relationship between rental income and interest payable at a stressed rate. A result above the lender's threshold signals that rental income covers interest costs by the required margin. A result below it indicates a shortfall under the stress scenario.

The calculation does not model capital appreciation or depreciation, tenant turnover, void periods, maintenance spend, property management fees, or local market conditions. It isolates the income-to-interest relationship. Use it as one lens among several when evaluating a property's financial viability.

For illustration only

This calculator models scenarios based on the figures you enter. Results are estimates and for educational illustration. Actual lending decisions depend on a lender's full assessment criteria, your personal finances, and property-specific factors. A qualified mortgage adviser can verify these assumptions before any purchase commitment.