Buy to Let Mortgage Calculator UK 2026: How to Work Out Your BTL Costs

How a Buy to Let Mortgage Calculator Works

A buy to let mortgage calculator shows the monthly interest payment on a buy to let mortgage, the rental yield on the property, and whether the rental income covers the payment at the lender's stress test rate. Using a buy to let mortgage calculator before viewing properties helps set realistic budget parameters.

The key inputs for a buy to let mortgage calculator are: the property purchase price, the deposit amount (which determines the loan-to-value ratio), the mortgage interest rate, the expected monthly rental income, and the mortgage term. Most buy to let mortgage calculators also show the gross and net yield.

A buy to let mortgage calculator is a planning tool. The actual rate available on the mortgage depends on the lender's assessment of the property, the landlord's income and experience, and the LTV ratio. Rates from a buy to let mortgage calculator at a headline rate should be treated as indicative until a lender formally offers a product.

Buy to Let Mortgage Calculator: Rental Coverage Ratio

The most important output of a buy to let mortgage calculator for a lender is the rental coverage ratio - whether the monthly rental income is sufficient to cover the monthly interest payment at a stressed interest rate. Most lenders require rental income to be 125 percent of the interest payment at a stress test rate of 5.5 to 6 percent.

Using a buy to let mortgage calculator: a 200,000 pound buy to let mortgage at a 5.5 percent stress rate requires a monthly interest payment of approximately 917 pounds. At the 125 percent coverage ratio, the minimum monthly rental income required is 1,146 pounds. If the property only achieves 900 pounds per month, the lender will not advance the full 200,000 pounds.

Higher-rate taxpayers face a 145 percent rental coverage ratio with many lenders, following the phasing out of full mortgage interest tax relief. A buy to let mortgage calculator for higher-rate taxpayers should reflect this stricter ratio.

Buy to Let Mortgage Calculator: Gross and Net Yield

Gross rental yield, one of the key outputs of a buy to let mortgage calculator, is calculated as annual rental income divided by the purchase price, expressed as a percentage. A property costing 250,000 pounds that achieves 1,000 pounds per month in rent has a gross yield of 4.8 percent.

Net yield, the more meaningful figure, deducts all costs from the rental income before calculating the return. A buy to let mortgage calculator showing net yield should deduct: void periods (typically 8 percent of potential rent), letting agent fees (8 to 15 percent), maintenance and repairs (1 percent of property value per year), landlord insurance, and mortgage interest.

For the property above with an 80 percent LTV buy to let mortgage at 5 percent, net yield after all costs and mortgage interest is typically 1 to 2 percent. This represents the cash return on the deposit, not total return - capital appreciation adds to the total return over time.

Buy to Let Mortgage Rates in 2026

Buy to let mortgage rates in the UK as of mid-2026 depend on the loan-to-value ratio, the property type, the landlord's income and portfolio size, and whether the mortgage is for an individual or a limited company. A buy to let mortgage calculator should use current rates obtained from a broker or lender.

As a general framework: 60 percent LTV buy to let mortgage rates are the most competitive, typically available from 4 to 5 percent fixed. At 75 percent LTV, rates are typically 0.3 to 0.7 percent higher. At 80 percent LTV - the maximum for most lenders - rates are the highest in the standard buy to let mortgage range.

Limited company buy to let mortgages, where the property is purchased through a special purpose vehicle company, have become more common since the loss of higher-rate mortgage interest tax relief for individual landlords. Limited company rates are typically slightly higher than individual rates but may be more tax-efficient for higher-rate taxpayer landlords.

What Lenders Assess Beyond the Buy to Let Mortgage Calculator

A buy to let mortgage calculator gives the rental coverage calculation but lenders assess additional factors not captured in the tool. These include the landlord's personal income (most lenders require a minimum of 25,000 to 40,000 pounds), their existing property portfolio size, the property type and construction, and the tenancy type.

Houses in multiple occupation (HMO), student lets, short-term holiday lets (Airbnb), and new-build flats all face different treatment from standard buy to let mortgage lenders. Some lenders exclude these property types entirely; specialist lenders assess them differently. A buy to let mortgage calculator for these property types should not use standard residential rates.

First-time landlords who also own no residential property face stricter criteria with some lenders. The absence of an existing residential mortgage is seen as a negative in some lenders' models, as there is no track record of managing a mortgage payment.

Buy to Let Mortgage Calculator: Ltd Company vs Personal

For higher-rate taxpayer landlords, running a buy to let mortgage calculator comparison between personal ownership and limited company ownership is an important planning step. Since April 2020, individual landlords can only claim basic-rate tax relief on mortgage interest, regardless of their personal tax rate. Limited company landlords deduct mortgage interest as a business expense before calculating corporation tax.

The buy to let mortgage calculator comparison for a 40 percent taxpayer will typically show a lower post-tax cost of borrowing through a limited company, though this must be weighed against the additional administration costs, higher mortgage rates, and the complexity of extracting profits from the company.

A buy to let mortgage calculator comparison is a starting point, not a definitive answer. A qualified tax adviser familiar with property investment can model the full scenario including acquisition costs, ongoing tax liabilities, and eventual sale, to determine whether a limited company structure produces a better outcome for a specific landlord's circumstances.

Frequently Asked Questions

Last reviewed June 2026 by Chandraketu Tripathi, Finance Editor, Kaeltripton.com