Buy-to-let borrowing calculator

    Estimate how much you may be able to borrow for a buy-to-let mortgage based on the property's expected monthly rental income. The calculator uses a typical lender interest cover ratio stress test to give an indicative starting point. Actual borrowing will depend on the lender's criteria, the property, loan-to-value, product type, tax position and your wider circumstances.

    This tool provides general guidance only. It is not a mortgage application, offer, illustration or regulated advice under Financial Conduct Authority rules. Your actual rate, borrowing and monthly payment will depend on the lender's assessment of your individual circumstances.

    Speak to a Nexpad adviser for buy to let mortgage advice

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Think carefully before securing other debts against your home. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Rental income is not guaranteed, and periods without a tenant can affect your ability to meet payments.

    How buy-to-let borrowing is calculated

    Buy-to-let borrowing is usually driven mainly by the property's expected rental income, rather than your personal income. Lenders typically apply an interest cover ratio, known as an ICR, to check whether the rent is sufficient to cover the mortgage interest at a stressed interest rate.

    As a general guide, lenders often use an ICR of around 125% for basic-rate taxpayers and around 145% for higher-rate taxpayers, although criteria vary by lender. Limited company applications, portfolio landlords and different product types may be assessed differently.

    In practice, this means the monthly rent normally needs to exceed the stressed monthly interest payment by the lender's required margin. A stronger rent-to-property-value yield can increase the amount you may be able to borrow.

    Costs and tax to factor in

    Buy-to-let deposits are commonly around 20% to 25% of the property value, although requirements vary by lender, property type and applicant profile. Arrangement fees can be higher than on residential mortgages and may be charged as a flat fee or as a percentage of the loan.

    If you buy an additional residential property in England or Northern Ireland, you may need to pay the higher rates of Stamp Duty Land Tax. Scotland and Wales have their own equivalent property tax rules.

    Rental profit is taxable. For individual landlords, mortgage interest relief is generally given as a basic-rate tax credit rather than deducted in full from rental income. Limited company tax treatment is different, so you should take advice from a qualified accountant or tax adviser.

    Regulation and consumer protections

    Most buy-to-let mortgages are treated as investment or business lending and do not have the same regulatory protections as residential mortgages. Some cases are classed as consumer buy-to-let, for example where the property was inherited or was previously your home. These fall under a separate consumer buy-to-let regime.

    Nexpad will explain which category your mortgage falls into and what protections apply before you proceed.

    Frequently asked questions

    How much can I borrow on a buy-to-let mortgage?

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    Buy-to-let borrowing is usually based on the property's expected rental income and the lender's interest cover ratio at a stressed interest rate. The calculator provides an indicative estimate only. The actual amount you can borrow will depend on the lender's criteria, the property, loan-to-value, product type, credit profile, tax position and wider circumstances.

    Are buy-to-let mortgages regulated by the FCA?

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    Most buy-to-let mortgages are not regulated in the same way as residential mortgages, as they are generally treated as investment or business borrowing. A smaller category, known as consumer buy-to-let, is covered by a separate regulatory regime. This can apply where you did not buy the property mainly as a business investment, such as if you inherited it or previously lived in it.

    What deposit do I need for a buy-to-let?

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    Buy-to-let deposits are commonly around 20% to 25% of the property value. Some lenders may consider different deposit levels, but lower deposits can mean fewer product options, higher rates or stricter affordability checks.

    Should I buy in my personal name or through a limited company?

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    This depends on your tax position, investment plans, expected rental profit, future portfolio growth and how you intend to use or reinvest income. It is a tax and legal structuring decision, so you should speak to a qualified accountant or tax adviser before deciding.

    Ready for a tailored recommendation?

    Speak to a Nexpad adviser about your circumstances, deposit and plans. We access a comprehensive panel of lenders to help find a mortgage suited to you. There is no obligation and the initial conversation is free.

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