Buy-to-let stress test calculator
The check every BTL lender runs before your deposit even matters: does the rent cover the interest at the stressed rate?
Lender criteria vary: some stress at pay rate + 2 points, some use floors above 5.5%, and five-year fixes are often stressed at the pay rate. Guidance only, not mortgage advice.
What is a buy-to-let stress test?
Lenders check that the rent covers the mortgage interest at a stressed rate, usually your pay rate plus 2 percentage points or a floor around 5.5%, whichever is higher. The rent must cover 125% of that stressed interest for basic-rate taxpayers, typically 145% for higher-rate.
What is ICR in a buy-to-let mortgage?
Interest Coverage Ratio: annual rent divided by the annual interest bill at the stressed rate. An ICR of 145% means the rent is 1.45 times the stressed interest.
How much can I borrow on a buy-to-let?
Roughly: annual rent divided by (target ICR x stressed rate). At £800 a month rent, a 5.5% stress rate and a 145% target, that caps the loan around £120,000 regardless of your deposit.