Enter Loan Details
The mortgage amount you wish to borrow
Requires 125% rental cover with 20% tax credit on interest
The actual interest rate you'll pay
Rate used for affordability calculation
Understanding the Calculation
Stress Testing
Lenders assess affordability using a stressed rate, which can be equal to the pay rate (for some £-for-£ remortgages) or typically 1-2% above the pay rate.
125% vs 145% Cover
Basic rate taxpayers & Ltd Co: Need rent to be 125% of stressed payment
Higher rate taxpayers: Need 145% due to less favorable tax treatment
Why Rent Higher?
The calculated rent is the minimum. You should charge more to cover:
- Void periods (empty property)
- Repairs and maintenance
- Management fees (10-15%)
- Buildings insurance
- Ground rent & service charges
- Safety certificates
Personal Income
Most BTL lenders require you to have a minimum personal income (typically £25k+) regardless of rental income.
Ready to take the next step?
Our buy-to-let specialists can help you structure your investment tax-efficiently and find the best rates — no obligation.