Buy-to-Let Mortgage Affordability Calculator
Calculate LTV, ICR stress test, rental yield and the full Section 24 tax impact for basic-rate and higher-rate taxpayers — 2024/25.
Buy-to-Let Mortgage Affordability Calculator
ICR check, rental yield, Section 24 tax impact — 2024/25
Property
Most BTL lenders require at least 25%
Finance
Interest-only BTL rate — typical 4.5–6.5%
Insurance, lettings agent, maintenance, ground rent, etc.
Tax
Determines ICR factor and Section 24 tax impact
BTL affordability tips 2024/25
- Section 24 is the biggest change for landlords since 2020: Higher-rate taxpayers can no longer deduct mortgage interest against income. The 20% tax credit may leave you worse off than the pre-2017 regime. Always model your after-tax position before purchasing.
- ICR is calculated at a stressed rate: Lenders typically stress-test at 5.5–6% even if the actual rate is lower. Make sure your rent passes the ICR at the stressed rate, not just your current rate.
- Owning BTL through a limited company: Companies are not affected by Section 24 — they can still deduct mortgage interest as a business expense. However, company mortgages carry higher rates and you pay corporation tax and dividend tax when extracting profits.
- Void periods reduce your effective yield: A 5% void rate (about 2–3 weeks/year) is typical; plan for 10% in the first year with a new tenant. Factor voids into your yield calculation.
- SDLT surcharge adds to your upfront costs: From 31 October 2024, the additional dwelling surcharge is 5% on top of standard rates. Budget this alongside legal fees and survey costs.
Typical BTL lender requirements 2024/25
| Criteria | Typical requirement |
|---|---|
| Maximum LTV | 75% (some to 80%) |
| ICR — basic-rate taxpayer | 125% (1.25×) at stressed rate |
| ICR — higher-rate taxpayer | 145% (1.45×) at stressed rate |
| Stressed rate | 5.5% (typical) or pay rate + 2% |
| Minimum personal income | £25,000/year (most lenders) |
| Minimum property value | £50,000–£100,000 |