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 property price of 250,000, monthly rent of 1,300, ltv of 75%, stress rate of 7%, the calculation works out to 118.86%. The defaults are meant as a starting point, 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

Run the calculation at your current rate, then run it again at a rate 2–3 percentage points higher. That's roughly what a product reset could bring at renewal, and it's a useful check on whether you can afford the mortgage in a higher-rate world, not just today's.

What this doesn't capture

The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.

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. Always verify assumptions with a qualified mortgage adviser before committing to a purchase.