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Buy to Let Calculator

Ideal for first-time and existing buy to let landlords, our buy to let calculator is designed to calculate expected rental yield. Expressed as a percentage, its crucial to know what return you can expect on your investment before you search and apply for a buy to let mortgage. The calculator is straightforward and allows you to experiment with monthly or yearly parameters to see which buy to let option suits you best. Please note, the calculator is intended to give an indication only.


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Choose a buy to let category below and start comparing providers today. Alternatively, speaking to a qualified mortgage broker can be advantageous, especially if you are a first time landlord. 

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How are buy-to-let mortgages calculated?

Buy-to-let mortgage rates are calculated on your loan-to-value (LTV) and the duration of the mortgage deal. Usually, the cheapest buy-to-let mortgages are those with the lowest LTV of 60% and shorter deal terms (avoiding the lender’s standard variable rate).

Lenders treat mortgages for a rental property as a higher risk than a residential mortgage. This means buy-to-let mortgages generally have a higher minimum deposit of 20% and come with higher interest rates and fees compared to residential mortgages.


How much can I borrow on a buy-to-let mortgage?

Mortgage lenders usually require your rental income to be at least 125% of your monthly mortgage payments or mortgage interest. Some lenders may require a higher minimum rental income sometimes over 145%. As part of this calculation, lenders will use a managed rate and not your actual mortgage product rate to calculate your monthly buy-to-let mortgage payment – in a lot of cases, this is 5.5%. You will also need to meet the lender’s minimum salary requirements.

Should I speak to a mortgage broker?

Buy to let mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice. Contacting a mortgage broker can be particularly helpful if you are a first time landlord.

Speak to an award-winning mortgage broker today



Call Mortgage Advice Bureau on 0808 149 9177 or  request a callback


Talk with a member of our mortgage team over the telephone and get advice on which mortgage is right for you.


Lines are open Monday to Friday 8am to 8pm, Saturday 9am to 1pm excluding bank holidays.


 Mortgage Advice Bureau offers fee-free mortgage advice for Moneyfacts visitors that call on 0808 149 9177. Calls may be recorded. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Your home may be repossessed if you do not keep up repayments on your mortgage.


How much would a £100,000 buy-to-let mortgage cost?

A £100,000 buy-to-let mortgage at a rate of 1.39% fixed for two years (60% LTV) with a fee of £1,499 would cost you £10,973.93 over the two-year term. This would be a repayment mortgage over a 25-year term.

What is a good return on a buy-to-let mortgage?

You can use three different calculations to find out if your property investment is paying a satisfactory return. These are rental yield, return on investment and cash on cash.

How is rental yield calculated?

To work out rental yield, you take the annual rent divided by the value of the investment property multiplied by 100.

Rental yield = (Annual rent / property value) x 100

For example, a £250,000 property earning £860 per month in rent would achieve a 4.16% yield.

How is return on investment calculated?

Your return on investment is calculated by calculating your earnings less your cost of investment, divided by the cost of investment. Then multiplied by 100 to get a percentage.

Return on investment = (Total of earnings – cost of investment) / cost of investment x 100

This calculation is very simplified and is not specific to buy-to-let investments

How to calculate cash on cash returns for your buy-to-let property

This calculation allows you to see the return on your initial cash investment less your monthly mortgage payments.

Cash on cash return = (Net annual cash flow/total cash invested) x 100

Cash invested includes any deposit you needed for the mortgage, any additional fees connected to your investment and any costs for work or refurbishments made to the property.

Net annual cash flow is your annual rental income less your annual mortgage payments.

For example, you invest £50,000 as a deposit for your buy-to-let mortgage and spend £10,000 in renovations. Your total cash invested is £60,000. You pay £350 per month for your buy-to-let mortgage and receive £860 in rental income. Your net annual cash flow is £6120. Your cash on cash return would be 11.4%.

Why is it important to calculate your investment return as a buy-to-let landlord?

Rental yield is a measure of your annual return on your buy-to-let investment. You can use it to compare it to the rates of return on other investments such as savings accounts and to check your investment is outperforming inflation.

What is a good return on a buy-to-let property?

A good rental yield varies depending on the location of the property due to property costs and the health of the rental market. The top 25 locations for rental yield in the UK achieve between 6.99% and 10.00%. Source – Totally Money Buy to Let Yield Map 2019/20.

The stamp duty holiday, additional properties and buy-to-let

On 8 July 2020, the Chancellor introduced an 'stamp duty holiday', lasting until the end of March 2021. This has been extended to the end of June 2021.

During this period, no stamp duty will be payable for first-time buyers and those purchasing their only property up to £500,000 in England and Northern Ireland. From July to the end of September 2021 the property value threshold will reduce from £500,000 to £250,000 which reduces the value of the stamp duty holiday.

Those buying an additional property, such as a holiday home or buy-to-let, will have to pay a reduced stamp rate of 3% on the first £500,000 (£250,000 from July 2021) of the property’s purchase price during this period.

For additional properties in excess of £500,000, buyers will have to pay 5% stamp duty up from £500,000 (£250,000 from July 2021) to £925,000, 13% on £925,000 to £1.5 million and a full 15% on any additional property purchase over £1.5 million in value.

To qualify for the reduction, the property purchase must complete before the end of the stamp duty holiday.

For more information, see our stamp duty guide or go direct to the official HM Government website for stamp duty land tax.

What is the best buy-to-let mortgage for you?

Finding the right buy-to-let mortgage depends on the circumstances of your property and yourself. You may find that to be eligible for some buy-to-let mortgages that you need to be an experienced landlord rather than a first-time landlord. Some lenders will not accept properties of unusual construction type, including flat and thatched roofs while others may have rules about local authority properties or flats above commercial premises. Some lenders also restrict multiple properties or houses of multiple occupation. 

You can find the right buy-to-let mortgage either by researching the market directly using our buy to let comparison table or by speaking to our preferred mortgage broker.



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