Buy-to-Let Rental Income Calculator
It should be emphasised that this is a very generic guide that uses a 125% stress test rate. As with everything in the mortgage market, your individual circumstances will dictate whether you qualify for a buy-to-let mortgage. We strongly advise that you speak to one of our advisers about your own situation before committing to anything.
This is not a quotation under the Consumer Credit Act. Figures are subject to validation of income, credit checks and a property valuation.
The buy-to-let minimum rent calculator is a great way to start – but it’s certainly not a definitive answer – and if it’s not the answer you’re looking for, our experts can review your full situation and advise on the most appropriate course of action, including products you might not previously have considered.
How Much Rental Income Do I Need for a Buy-to-Let Mortgage?
Our minimum buy-to-let rent calculator will tell you how much rental income you need to generate each month to qualify for a mortgage on a buy-to-let property. This will give you an estimate of how much to charge tenants to rent your residential or commercial property.
The Topics Covered in this Article Are Listed Below:
What Do These Fields Mean?
When measuring affordability for a mortgage for buy-to-let, lenders stress test applications against mortgage rates rising to 5% and sometimes to 5.5%, even if the agreed final rate is lower, to guard against unexpected rises in costs for landlords.
Lenders also typically require a "buffer" of 125% or 145% - i.e. the rental income each month must be 125% of the mortgage repayments.
The 125% stress test is for basic rate taxpayers and properties held in a limited company and the 145% is for higher rate taxpayers.
Enter your proposed mortgage amount, select 5% or 5.5% (some lenders are beginning to stress test at a higher level, so you may want to see both scenarios) and press Calculate.
Want to Know More About BTLs?
We have also sorts of information to aid you on your journey to landlordship. Learn what it means to be a portfolio landlord, how getting a buy-to-let mortgage works, what LTD company BTL mortgages are and more.
Note: the Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
Need Another Calculator?
See our list of mortgage calculators for more tools to help you get started.
Buy-to-Let Rental Income FAQs
How Accurate Are Buy-to-Let Rental Income Calculators?
A buy-to-let rent calculator is designed to provide a very quick estimate of how much rental income you’ll likely need to generate each month to qualify for a buy-to-let mortgage. The calculation is normally based on a set of variables, and in our case, these are a 125% income and a stress test rate of 5% or 5.5%.
The actual monthly rental income you’ll need will depend on the particular lender you go with. Each lender will have their own method for calculating monthly rental income based on various factors, such as your age, monthly outgoings, credit history and other loan amounts.
The calculator will often assume a rental income of at least 125% of your mortgage repayments, so as to build in some "buffer". Some buy-to-let income calculators can assume a rental income as high as 145%.
To get the most accurate information for your circumstances, we advise contacting our experts, who can review your situation in full and provide advice on the most suitable products and next steps.
What Information Do I Need to Input into a Buy-to-Let Rental Income Calculator?
A buy-to-let mortgage rent calculator usually only needs some fairly minimal information to provide a quick rental income estimate. You’ll need the loan value required and the stress test rate you want to apply, typically 5% or 5.5%.
Is There a Limit to How Many Properties I Can Analyse with a Buy-to-Let Rental Income Calculator?
A buy-to-let income calculator usually only analyses the rental income for one property at a time, but some will take into account how many other buy-to-let mortgages you already have.
Legally, there’s no limit on the number of buy-to-let mortgages you can hold as you can take out as many as you want and can afford. Most lenders will, however, minimise their own risk by limiting the number of buy-to-let mortgages per borrower, or the amount in total that one person can borrow.
There are options for mortgages across multiple properties, such as those for portfolio landlords. For more information on these types of products, call us on 0330 433 2927as we can arrange a mortgage with a lender that can cater to these circumstances.
Can Buy-to-Let Rental Income Calculators Help Me Decide Which Property to Purchase?
A buy-to-let rental income calculator can only provide you with a quick, high level estimate of how much rental income you’ll likely need to generate to qualify for a buy-to-let mortgage. This can be a really useful starting point, but it won’t be a definitive answer as ultimately it depends on the lender.
How much you can borrow, what income you would need to generate, and in turn, the type of property you’ll be able to buy, will depend on many factors. This includes your age, credit history, monthly outgoings, and other loans and mortgages you have.
Speak to an expert who can review your personal circumstances and advise on a suitable course of action, including products that might be a good fit.
Is It Possible to Use a Buy-to-Let Rental Income Calculator to Estimate the Rental Income for Different Types of Properties such as Houses and Flats?
Most buy-to-let rental income calculators base monthly rental income estimates on a loan amount, rather than the type of property you’re looking to buy. You’ll usually be able to estimate rental income and the loan amount required by researching what properties of a similar size and specification are in your desired location. You can also use a buy-to-let rental yield calculator to compare the likely rental yield or annual income of different properties.
Do Buy-to-Let Rental Income Calculators Factor In Additional Expenses, such as Stamp Duty and Property Management Costs?
Typically, buy-to-let rental income calculators won’t factor in specific additional costs and expenses, like Stamp Duty on buy-to-lets. The key measurements normally used are the loan value, the stress test rate, and an assumed rental income of at least 125% of mortgage payments.
The application of the stress test rate and 125% income accounts for some additional costs landlords may face to test affordability. However, a buy-to-let rent calculator won’t usually use specific costs in its calculations as it will vary from lender to lend.er
Any additional costs you must pay, such as Stamp Duty, solicitors or estate agent fees, and property management costs, are in addition to the minimum monthly income calculated.
Buy-to-Let Mortgage Calculator
Want to know how much you could potentially borrow on a buy-to-let mortgage? Find out with our free and easy calculator below.
Rental Yield Calculator
Here you can use our free and easy calculator to work out the rental yield on your buy-to-let property. You’ll also find information on what a rental yield is and why it’s important.
Buy-to-Let Stamp Duty Calculator
Find out how much Stamp Duty you’ll pay on your new buy-to-let property with our free and easy Stamp Duty calculator for second homes.
Capital Gains Tax Calculator
On this page you’ll find our free and easy Capital Gains Tax Calculator that can help you work out how much CGT you’ll pay when selling a property that’s not your main residence.
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