Buy-to-Let Mortgage Calculator
Work out the monthly payment on a buy-to-let or residential mortgage from your own figures. Choose interest-only or repayment and enter the property value, deposit, interest rate, term and expected monthly rent. The calculator shows the monthly payment, the loan amount, loan to value and deposit percentage, and for buy-to-let the gross rental yield and how the rent compares with the payment.
How a buy-to-let mortgage payment is worked out
Most buy-to-let mortgages are taken on an interest-only basis. You pay the interest each month and the amount you borrowed stays outstanding until the end of the term, when it is repaid from a sale, a remortgage or savings. The monthly payment is simple: loan amount, multiplied by the interest rate, divided by 12.
On a repayment mortgage each payment covers the interest and part of the loan, so the balance falls to zero by the end of the term. The payment is higher, but you own the property outright at the end.
Worked example
A £300,000 property with a £75,000 deposit leaves a £225,000 loan at 75% loan to value. At an interest rate of 4.5%:
- Interest-only: £225,000 x 4.5% / 12 = £843.75 a month.
- Repayment over 25 years: about £1,251 a month.
The calculator above does this arithmetic for whatever figures you enter.
How lenders test the rent: the interest cover ratio
A buy-to-let lender mainly looks at whether the rent covers the mortgage, not just your salary. The test is the interest cover ratio (ICR): monthly rent divided by the monthly interest at a notional stress rate, which is usually higher than the rate you will actually pay.
Lenders set their own rules, but two thresholds are common. Rent often has to cover 125% of the stressed interest for basic-rate taxpayers and limited companies, and 145% for higher and additional-rate taxpayers borrowing in their own name. Stress rates of around 5% to 5.5% are common, and some lenders test five-year fixes at the pay rate instead.
Worked example
For the same £225,000 loan stressed at 5.5%, the monthly interest is £1,031.25. To pass:
- At 125%, the rent needs to be at least £1,289 a month.
- At 145%, the rent needs to be at least £1,495 a month.
Turned the other way round, a rent of £1,200 a month would support a loan of roughly £209,000 at 125%, or £181,000 at 145%, on those same assumptions. Deposit, credit history, property type and the lender's own criteria all change the real answer.
Deposits and loan to value
Most buy-to-let lenders ask for a deposit of at least 20% to 25% of the purchase price. A bigger deposit lowers the loan to value, which usually opens up a wider choice of products and makes the rental cover test easier to pass because the loan is smaller.
Personal name or limited company
Individual landlords cannot deduct mortgage interest from rental income when working out their tax. Under the rules known as Section 24 they get a tax credit worth 20% of their finance costs instead, which leaves higher-rate taxpayers paying more. A limited company can treat finance costs as a business expense, but it pays corporation tax and it costs money to take profits out, and company buy-to-let mortgages often carry higher rates and fees. Our guide to limited company buy-to-let covers the trade-offs. Take advice from an accountant before choosing a structure.
The other costs of buying
Stamp duty is often the largest upfront cost on a rental purchase, because a surcharge applies to additional properties. Use the stamp duty calculator to work it out, and read buy-to-let mortgage rates in 2026 for how product fees change the true cost of a deal. Once the numbers work, how to maximise rental yield covers the running costs, including letting agent fees.
AgentCheck is not a mortgage lender or adviser and does not give mortgage advice. The calculator shows illustrations based only on the figures you enter. It does not search for or compare mortgage deals, and lenders apply their own criteria.
Frequently asked questions
How is a buy-to-let mortgage payment calculated?
On an interest-only mortgage the monthly payment is the loan amount multiplied by the interest rate, divided by 12. A £225,000 loan at 4.5% costs £843.75 a month. A repayment mortgage also pays off part of the loan each month, so the payment is higher.
What is an interest cover ratio (ICR)?
It is the monthly rent divided by the monthly mortgage interest at a stress rate set by the lender. Many lenders want the rent to cover 125% of that interest for basic-rate taxpayers and limited companies, and 145% for higher-rate taxpayers, but criteria vary between lenders.
How much can I borrow on a buy-to-let based on the rent?
Divide the monthly rent by the lender's cover ratio, multiply by 12 and divide by the stress rate. With £1,200 rent, a 125% ratio and a 5.5% stress rate, that is roughly £209,000. At 145% it is about £181,000. Your deposit and the lender's own criteria also limit the loan.
How big a deposit do I need for a buy-to-let mortgage?
Most buy-to-let lenders ask for at least 20% to 25% of the property price. A larger deposit usually gives more product choice and makes the rental cover test easier to pass.
Is interest-only or repayment better for buy-to-let?
Interest-only keeps monthly payments lower, which helps cash flow and the rental cover test, but the full loan is still owed at the end of the term. Repayment costs more each month and clears the debt. The right choice depends on your plans for the property, so take advice before deciding.