Buy-to-Let Calculator

Analyze your buy-to-let investment potential with comprehensive yield calculations, cash flow analysis, and tax implications for UK rental properties.

Rental Yield
Cash Flow
ROI Analysis

Property Investment Details

Enter your buy-to-let property information

Property Details

£
Total purchase price of the investment property
£
Expected monthly rental income
£
Cash deposit for the property (typically 25% minimum for BTL)
%
Buy-to-let mortgage interest rate
Length of the mortgage term

Property Costs & Expenses

%
Letting agent fee as percentage of rental income
£
Annual landlord insurance cost
£
Annual maintenance and repair costs
£
Annual service charge or ground rent (if applicable)
weeks/year
Expected vacant weeks per year

Tax Information

Your marginal income tax rate
Check if property is owned through a limited company

Key BTL Metrics

  • Gross Yield: Annual rent ÷ property price × 100
  • Net Yield: Annual profit ÷ property price × 100
  • Cash-on-Cash Return: Annual cash flow ÷ deposit × 100
  • Rental Cover Ratio: Monthly rent ÷ mortgage payment
  • LTV Ratio: Mortgage ÷ property value × 100
  • 1% Rule: Monthly rent should be 1% of purchase price

BTL Considerations

  • Section 24 Tax: Mortgage interest relief phased out for individuals
  • Minimum Deposit: Usually 25% for buy-to-let mortgages
  • Stress Testing: Lenders test at higher rates (typically 5.5%+)
  • Additional Costs: Higher stamp duty, legal fees, surveys
  • Void Periods: Budget for vacant periods between tenants
  • Capital Gains Tax: Payable on sale of investment property

Frequently Asked Questions

Get answers to common questions about buy-to-let property investment

What is a good rental yield for buy-to-let property?

A good gross rental yield typically ranges from 6-8% in most UK markets. However, this varies by location - yields tend to be higher in northern England and lower in London and the South East. Net yields (after expenses) of 3-5% are generally considered acceptable for buy-to-let investments.

How much deposit do I need for a buy-to-let mortgage?

Most buy-to-let mortgages require a minimum deposit of 25% of the property value. Some lenders may accept 20%, but this is less common. A larger deposit (30-40%) often secures better interest rates and more favorable lending terms.

What is the rental cover ratio and why is it important?

The rental cover ratio is the monthly rental income divided by the monthly mortgage payment. Most lenders require a minimum ratio of 125% (1.25x), meaning the rent must be at least 25% higher than the mortgage payment. This provides a buffer for void periods and unexpected costs.

How does Section 24 tax affect buy-to-let investors?

Section 24 restricts mortgage interest tax relief for individual landlords to the basic rate (20%), regardless of their income tax band. This significantly impacts higher-rate taxpayers. Many investors now use limited companies to avoid these restrictions, as companies can still claim full mortgage interest relief.

What additional costs should I budget for with buy-to-let?

Beyond the mortgage, budget for: letting agent fees (8-15%), landlord insurance (£200-500 annually), maintenance and repairs (1-2% of property value annually), void periods (2-6 weeks per year), legal fees, safety certificates, and higher stamp duty rates for additional properties.