Rental Income Calculator

Buy-to-let lenders use expected rental income as an important part of assessing whether the proposed mortgage is sustainable. The rent may be stress-tested against the mortgage using the lender's individual affordability criteria. Oportfolio's existing let-to-buy guidance similarly notes that potential rental income is stress-tested when assessing affordability.

Potentially. Stronger rental income can support a higher mortgage under some lenders' affordability calculations, but the final amount available will also depend on factors such as property value, LTV and the lender's criteria.

An Interest Coverage Ratio (ICR) is a calculation that buy-to-let mortgage lenders use to check whether a property's rental income is sufficient to cover the mortgage interest payments.

Rather than looking only at the rent you currently receive, lenders usually test the mortgage against an assumed interest rate, known as a stress rate. They then require the rental income to cover a certain percentage of that stressed mortgage payment.

For example, a lender using an ICR of 125% would require the expected rent to cover at least 125% of the stressed monthly mortgage interest. Some lenders use higher ICR requirements, such as 145%, particularly for higher-rate taxpayers.

The exact ICR and stress rate used can vary between lenders and may depend on factors such as your tax status, whether you are borrowing personally or through a limited company, and the mortgage product you choose.

Our rental income required calculator provides an indicative estimate, but a mortgage adviser can compare different lender calculations to establish how much rental income you may actually need for the mortgage you want.