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  • Discover Your Borrowing Potential Based on Rental Income and Investment Goals.

  • Calculate Your Maximum Loan Amount with Our Buy-to-Let Affordability Calculator.

  • Explore Mortgage Options That Suit Your Investment Budget and Objectives.

  • Gain Clarity on Your Loan Affordability for Confident, Informed Decisions.

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Buy to Let Affordability Calculator

Enter a few details below to get an estimate of your borrowing potential.

Whether you’re a first-time landlord or an experienced buy-to-let investor, our mortgage affordability calculator helps you understand how much you could comfortably borrow.

Buy-to-let affordability determines how much a landlord can borrow for an investment property, primarily based on the property’s rental income. Key factors influencing buy-to-let affordability include:
  1. Borrowing Structure
    Specify whether you’re borrowing as an individual or through a limited company. This choice impacts the interest coverage ratio (typically 125% to 145%) and the maximum loan amount, as lenders apply different criteria based on the borrowing structure.

  2. Interest Rate Assessment
    For short-term fixed and variable rates, lenders often add about 1.50% to the product rate in their affordability calculations. For fixed-rate products lasting five years or more, affordability is usually assessed at the product’s pay rate. This approach helps manage potential rate fluctuations.

  3. Property Type
    Properties like Houses in Multiple Occupation (HMOs) or Multi-Unit Freehold Blocks may require a higher interest coverage ratio than standard buy-to-let properties due to their unique risk profiles.

How much can i borrow ?

Discover your buy-to-let borrowing potential. Our calculator uses your expected rental income to estimate how much you might qualify for, just enter the monthly rental income.

Rental Income (per month/per property)
£
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Disclaimer: Rates apply for England and Northern Ireland only.
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Borrowing vehicle
Disclaimer: Rates apply for England and Northern Ireland only.

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Disclaimer: Rates apply for England and Northern Ireland only.

Buying a Second Home or Investment Property?

Calculate the Stamp Duty Land Tax (SDLT) for your additional property in England or Northern Ireland. Understand the potential impact of the additional 3% surcharge on second homes and buy-to-let properties.

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Frequently Asked Questions

What Factors Affect Buy-to-Let Affordability?

Buy-to-let affordability depends on various factors, including the rental income potential of the property, your borrowing structure (individual vs. limited company), and the lender’s interest rate assessment. Other factors include the type of property (standard buy-to-let vs. HMO or multi-unit), property location, and loan-to-value (LTV) ratio. Lenders also evaluate your existing portfolio if you’re a portfolio landlord, as well as any other personal or business income you may have. Our calculator helps assess these factors to give you an accurate estimate of your borrowing potential.

How Do Interest Rates Impact Buy-to-Let Mortgage Affordability?

Interest rates play a crucial role in determining buy-to-let mortgage affordability. For short-term fixed and variable rates, lenders typically add a 1.50% buffer to the product rate in their calculations. For five-year fixed rates or longer, they may assess affordability based on the pay rate. A lower interest rate generally improves affordability by reducing monthly payments, while higher rates may limit the loan amount available. Use our calculator to understand how varying interest rates affect your borrowing capacity.

How Does the Borrowing Structure (Individual vs. Limited Company) Impact Buy-to-Let Affordability?

The borrowing structure—whether you apply as an individual or through a limited company—significantly impacts buy-to-let affordability calculations. Lenders generally apply different rental income coverage requirements based on the borrowing structure to account for varying tax liabilities and risk profiles.

For example, if your monthly mortgage payment is £1,000, a lender might expect the rental income to be at least £1,250 if you’re applying through a limited company or if you’re a basic-rate taxpayer. However, if you’re a higher-rate or additional-rate taxpayer applying in your personal name, the lender may require a higher rental income, usually between £1,400 and £1,450, to cover the mortgage payments.

This distinction helps lenders ensure that, regardless of ownership structure, the rental income can adequately support the mortgage, even if market conditions change.

Can I Use a Buy-to-Let Affordability Calculator for an HMO or Multi-Unit Property?

Yes, our buy-to-let affordability calculator can help you estimate borrowing potential for Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs). However, please note that lenders may have different criteria for these property types, often requiring a higher interest coverage ratio due to perceived risk. The amount you can borrow will vary based on your unique circumstances, as well as the lender and rate you choose. For an accurate assessment, get in touch with our buy-to-let experts.

How Does Rental Income Affect Buy-to-Let Affordability?

Lenders assess buy-to-let affordability primarily by looking at the rental income the property can generate. Typically, lenders require the rental income to cover at least 125% to 145% of the mortgage payments, ensuring there’s a buffer for potential vacancies, maintenance costs, or interest rate increases.

For example, if your monthly mortgage payment is £1,000, a lender would generally expect the rental income to be around £1,250 if you own the property through a limited company or if you’re a basic-rate taxpayer. For higher-rate or additional-rate taxpayers who own the property in their individual names, the required rental income might be higher, typically between £1,400 and £1,450.

These coverage requirements help lenders ensure the mortgage remains affordable under different financial circumstances.

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