Buy-to-Let Calculator
Calculate rental yields, mortgage costs, and investment returns
Last updated: August 2026
Property Details
LTV: 75.0% (min 25% deposit for BTL)
Annual: £14,400
Mortgage
vs Repayment
Loan: £187,500
Expenses & Tax
Maintenance, insurance, management
Empty periods between tenants
For tax band calculation
Net Monthly Profit (After Tax)
-£118
Negative cash flow
Annual Profit
-£1,421
Negative Cash Flow
This property costs you £118/month to run. Consider increasing rent or reducing costs.
Income Breakdown
Expenses Breakdown
Purchase Costs
Key Metrics
Rental Coverage Ratio
140%
✗ Below 145% ICR requirement
Break-Even Rent
£1,226
Monthly rent to cover all costs
Below ICR Requirement
Most BTL lenders require rental income to be at least 145% of mortgage payment. You may struggle to get a mortgage at this rent level.
Understanding Buy-to-Let
⚠️ Major Tax Changes Since 2020
You can no longer deduct mortgage interest from rental income before calculating tax. Instead, you get a 20% tax credit on mortgage interest paid.
Before April 2020
Rental income: £15,000
Mortgage interest: -£8,000
Expenses: -£2,000
Taxable: £5,000
Tax (40%): £2,000
After April 2020
Rental income: £15,000
Expenses: -£2,000
Taxable: £13,000
Tax (40%): £5,200
Less 20% interest credit: -£1,600
Final tax: £3,600
Higher and additional rate taxpayers are hit hardest by these changes. This calculator includes Section 24 effects.
Typical Lender Criteria
- • Minimum 25% deposit (75% LTV max)
- • Interest Coverage Ratio: Rent must be 125-145% of mortgage payment
- • Minimum income: £25,000/year (some lenders)
- • Age limits: Usually under 75 at end of term
- • Minimum property value: £40,000-£50,000
- • Maximum number of BTL properties: Varies by lender
Interest-Only
- • Lower monthly payments
- • Better cash flow
- • No capital repayment
- • Most common for BTL
- • Need repayment strategy
Repayment
- • Higher monthly payments
- • Build equity over time
- • Own property at end
- • Worse cash flow initially
- • Lower LTV over time
Tax year 2026/27 | Stamp Duty includes 5% BTL surcharge (raised from 3% in Oct 2024) | Tax includes Section 24 mortgage interest restrictions
Related calculators
Other free UK tools that follow on from this calculation.
Rental Property Calculator
Full UK BTL analysis: cash flow, cap rate, cash-on-cash, IRR and Section 24 tax over your hold.
Cap Rate Calculator
Capitalisation rate, NOI ÷ property value, to compare UK rental properties like for like.
Rental Yield Calculator
Gross yield, net yield and cash-on-cash return for any UK buy-to-let.
Mortgage Calculator
Monthly repayments, total interest and LTV for any UK mortgage scenario.
Stamp Duty Calculator
SDLT for England & NI with post-April-2025 bands, plus Scotland LBTT and Wales LTT.
Capital Gains Tax Calculator
CGT on a gain at 18% / 24% above the £3,000 annual exempt amount, with BADR option.
Reviewed by
Alexandre Bernier, LLM (UK), CFP®, CIM®, PFP®. Financial planner with 18 years in banking and wealth management, holding a UK master of laws and the Canadian CFP®, CIM® and PFP® designations. Writes and reviews every calculator and article on FinanceToolz.
Last updated: August 2026. How figures are sourced, reviewed and corrected is set out in our editorial policy. This is general information, not regulated financial advice.
Sources
Every rate and threshold used by this calculator is taken from the official pages below. If a figure here disagrees with one of these, the official page is right, please tell us.