Will that buy-to-let actually stack up?
Gross yield ignores costs. Net yield ignores the mortgage stress test. Enter price, rent, costs and your BTL mortgage — and see whether the lender’s ICR check passes before you commit.
BTL mortgage ICR check
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What you might calculate next
How it works
Gross yield vs net yield
Gross yield = annual rent / purchase price × 100. Net yield deducts letting agent fees, insurance, maintenance, and void periods before dividing. A 7% gross yield might only be 4–5% net once running costs are included.
BTL mortgage ICR stress test
Most buy-to-let lenders require rental income to cover the monthly interest payment at a stressed rate (typically your pay rate + 2%, minimum 5.5%) by 125% for basic-rate taxpayers or 145% for higher-rate taxpayers.
Why 145% for higher-rate taxpayers?
Section 24 means higher-rate landlords face a larger effective tax bill on the same mortgage costs. Lenders account for this by requiring a higher coverage ratio to ensure you can still service the debt after tax.
Maximum borrowable
This calculator shows the maximum amount you could borrow against the rent — based on the ICR threshold and stressed rate. Use it to quickly check if a target LTV is achievable at a given rent level.
Void periods
Budget for 2–4 weeks of void per year (3.8–7.7% of annual rent) when estimating net yield and ICR. Insurance policies for rent guarantee cover void and tenant default — worth factoring into your costs.