Introduction
A buy to let mortgage helps you buy a property to rent out to tenants. But before you invest, you need to know what your monthly payments will be and how much you can borrow. That is where this buy to let mortgage calculator comes in.
This tool has two modes. The Repayment Calculator shows your monthly mortgage payment based on the property price, loan amount, interest rate, and term you enter. It works for both interest only and capital repayment mortgages. You can also see a stress test that shows what happens if interest rates go up. The Borrowing Calculator tells you the maximum amount a lender might offer based on your expected rental income. It uses the interest coverage ratio (ICR) that most buy to let lenders require, which means your rent must cover at least 125% of the monthly interest.1
Both modes give you a step-by-step breakdown of every calculation, a monthly cash flow estimate, and clear charts so you can see your numbers at a glance. Enter your details above to get started.
How to Use Our Buy to Let Mortgage Calculator
This calculator has two modes. The Repayment Calculator tells you your monthly mortgage payment, total interest, and cash flow. The Borrowing Calculator tells you how much you could borrow based on your rental income. Pick a mode using the tabs at the top, enter your details below, and your results will appear right away.
Repayment Calculator
Borrowing Purpose: Choose why you need the mortgage. Pick "Purchase" if you are buying a new property, "Remortgage" if you are switching an existing loan, or "First Time Landlord" if this is your first rental property.
Property Value / Purchase Price: Enter the full price of the property in pounds. This is used to work out your loan-to-value ratio.
Loan Amount: Enter how much money you want to borrow. This must not exceed 85% of the property value.
Deposit (% or £): Enter your deposit as a percentage or a pound amount. When you change one field, the other updates on its own. The loan amount also adjusts to match.
Mortgage Term: Enter the length of your mortgage in years. Most buy to let mortgages run between 5 and 35 years.
Annual Interest Rate: Enter the yearly interest rate your lender has quoted. This is shown as a percentage.
Repayment Type: Choose "Interest Only" to pay just the interest each month, which keeps your payments lower but leaves the full loan due at the end. Choose "Capital Repayment" to pay off both interest and part of the loan each month so the debt is cleared by the end of the term.
Property Type: Tick any boxes that apply to your property, such as HMO, Limited Company / SPV, or Holiday Let. These do not change the calculation but flag that different rates or rules may apply.
Expected Monthly Rental Income: Enter the rent you expect to receive each month. This is optional. If provided, the calculator shows a simple cash flow estimate of rent minus your mortgage payment.
Borrowing Calculator
Expected Monthly Rental Income: Enter the monthly rent you expect the property to earn. The calculator uses this with a 125% interest coverage ratio to find the most you could borrow.
Property Value: Enter the property price if you know it. This is optional. If provided, the calculator also applies a 75% loan-to-value cap and shows your gross rental yield.
Annual Interest Rate: Enter the yearly interest rate you expect to pay. The calculator uses this rate to work out how large a loan your rental income can support.
What Is a Buy to Let Mortgage?
A buy to let mortgage is a loan you use to buy a property that you plan to rent out to tenants. It is different from a regular mortgage because you are not going to live in the home yourself. Instead, you earn money each month from the rent your tenants pay. Lenders look at how much rent you expect to collect when they decide how much you can borrow.
How Buy to Let Mortgages Work
Most buy to let mortgages need a bigger deposit than a standard home loan. You usually need at least 25% of the property's value as a deposit, which means the lender covers up to 75% of the price. This percentage is called the loan to value ratio, or LTV. A lower LTV often means you get a better interest rate.
There are two main repayment types. With interest only, you pay just the interest each month, so your monthly cost is lower. But at the end of the mortgage term, you still owe the full loan amount. With capital repayment, you pay off both the interest and part of the loan each month. This means higher monthly payments, but the loan is fully paid off by the end of the term.
What Lenders Look At
Buy to let lenders use something called the interest coverage ratio, or ICR. This checks that your expected rent is enough to cover the mortgage payments with room to spare.1 Most lenders want the rent to be at least 125% of the monthly interest cost.1 If your rent is too low compared to the loan, the lender may offer you less money. Lenders also consider your overall financial health, including your debt-to-income ratio, especially if you have other mortgages or loans.
Costs to Keep in Mind
Owning a rental property comes with extra costs beyond the mortgage. You may need to pay for landlord insurance, property maintenance, letting agent fees, and periods when no tenant is living in the home. There is also stamp duty land tax, which is higher for buy to let properties, and you can estimate this cost with our Stamp Duty Calculator.3 These costs reduce the profit you actually take home from the rent.
Who Uses a Buy to Let Mortgage?
Buy to let mortgages are used by landlords who want to invest in property. Some landlords own the property in their own name. Others set up a limited company, sometimes called a special purpose vehicle (SPV), to hold the property. The right choice depends on your tax situation and how many properties you plan to own. If you rent a property to three or more people from different households, it is called a house in multiple occupation (HMO), and you may need a special licence and a specialist mortgage product.2