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Buy to let rental cover calculator
How much a landlord can borrow on buy to let is usually set by the rent. Lenders divide the annual rent by an interest cover ratio, often 125% or 145%, and a stress rate. This calculator shows the illustrative maximum loan that produces.
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Work out the rent test on your property
Enter the monthly rent to see the illustrative maximum loan.
Illustrative only. This is not a mortgage offer, an agreement in principle or a recommendation. The figure is the annual rent divided by the interest cover ratio and the stress rate, on an interest only basis. Lenders also apply loan to value limits, minimum rents and their own criteria, and their valuer confirms the rent. All lending is subject to underwriting and valuation. Most buy to let mortgages are not regulated by the Financial Conduct Authority.
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The calculator above applies the rent test most buy to let lenders use. It works on an interest only basis, which is how the rent test is usually calculated.
How does the rent test work?
The lender checks that the monthly rent covers the mortgage interest by a set margin, called the interest cover ratio (ICR), at a stressed interest rate. Rearranged, the maximum loan is the annual rent divided by the ICR and the stress rate. For example, £14,400 a year ÷ (1.25 × 5.5%) is about £209,000.
The ICR often depends on how the property is owned and your tax band. Our comparison of limited company vs personal name buy to let explains when 125% or 145% tends to apply.
How should I fill it in?
- Monthly rent: the rent the property achieves or is expected to achieve. The lender’s valuer will confirm it.
- Stress rate: 5.5% is a starting point. Try higher and lower rates to see how sensitive the figure is.
- ICR: 125% is common for limited companies and basic rate taxpayers; 145% for higher rate taxpayers buying personally.
Why is the result only a starting point?
Lenders also apply loan to value limits, so the deposit can cap the loan below the rent figure. Minimum rents, the property type, your experience as a landlord and any other properties you own all play a part. Our page on buy to let mortgages covers limited company purchases and portfolio landlords.
Common questions
How do buy to let lenders work out the maximum loan?
Most lenders divide the annual rent by the interest cover ratio and a stressed interest rate. On £1,200 a month at a 5.5% stress rate, that gives about £209,000 at 125% rent cover and about £181,000 at 145%. Loan to value limits and the lender's criteria also apply, and all lending is subject to underwriting and valuation.
What is the difference between 125% and 145% rent cover?
Many lenders use 125% for limited companies and basic rate taxpayers, and 145% for higher and additional rate taxpayers buying in their own name. The higher test means the same rent supports a smaller loan.
What stress rate do lenders use?
It varies by lender and product. Many use a rate above the one you would actually pay, and some use the pay rate itself on longer fixed rates. The calculator lets you try different stress rates.
Can my own income top up a shortfall in the rent?
Some lenders allow personal income to top up the rent test where the rent falls a little short. Not every lender offers this, and the rules vary.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All lending is subject to underwriting and valuation.
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