Rental Yield vs Mortgage Cost Calculator
Does rental income cover the mortgage?
Compare monthly rental income against mortgage cost to see buy-to-let cashflow position. Enter mortgage payment and running costs to size affordability.
What this tool does
This calculator compares rental income against property expenses to show whether a rental generates positive or negative monthly cashflow. It takes your monthly rent, mortgage payment, and running costs—such as maintenance, insurance, and management fees—then calculates the net position each month and projects it annually. The result illustrates whether rental income exceeds total outgoings or falls short. Rental income is the primary driver; even small changes in monthly rent significantly alter the outcome. A typical scenario involves a property owner checking whether tenant payments cover debt servicing and upkeep. Note that this calculation assumes consistent occupancy and does not account for vacant periods, which typically reduce annual income by 5–10%. Results are for cashflow illustration only and do not cover tax, capital appreciation, or financing variations.
Enter Values
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Buy-to-let only works if rent covers mortgage plus costs. 1,500 rent minus 900 mortgage minus 300 running costs (letting fees, maintenance, insurance) = 300/month surplus. Positive cashflow is the minimum; anything negative relies on capital appreciation to be worthwhile.
A worked example
Try the defaults: monthly rent of 1,500, monthly mortgage payment of 900, monthly running costs of 300. The tool returns 300.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Monthly Rent, Monthly Mortgage Payment, and Monthly Running Costs. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the option with the lower calculated total changes.
The formula behind this
Simple monthly cashflow calculation. Does not include void periods (vacancy) which typically run 5-10% — apply that adjustment if planning long-term. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
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.
Comparing £1,500 in rental income against £900 in mortgage payments plus £300 in costs gives 300.00.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes monthly cashflow by subtracting the monthly mortgage payment and running costs from the monthly rental income. The formula treats all three inputs as constant figures and assumes they remain stable throughout the period modelled. The result represents the net monthly surplus or deficit before accounting for taxes, maintenance emergencies, or capital appreciation. The model does not adjust for void periods (months when the property is unoccupied between tenants), which commonly range from 5 to 10 percent annually. Users planning medium to long-term assessments should manually reduce expected rental income to reflect typical vacancy rates. The calculation also excludes transaction costs, insurance variations, and changes to interest rates or rental market conditions.
References
Frequently Asked Questions
What's positive enough?
Does this include tax?
Typical running costs?
Void periods to plan for?
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