How Much Can You Borrow for Buy-to-Let?
Calculate your borrowing power using real ICR (Interest Coverage Ratio) calculations and stress tests that UK lenders use.
Property Details
insufficient Affordability
Does not meet standard criteria. Consider a larger deposit, higher rent, or different property.
Key Numbers
Loan Amount
£187,500
Deposit Required
£62,500
Monthly Payment
£859
Interest only
Monthly Profit
£341
Before tax/costs
Interest Coverage Ratio (ICR)
Required ICR: 125% (for basic rate taxpayers)
Maximum Borrowing
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What is ICR?
Interest Coverage Ratio (ICR) is how lenders assess if your rental income sufficiently covers mortgage payments. It's calculated as: (Annual Rent ÷ Annual Interest) × 100. Most lenders require 125-145%.
What is Stress Testing?
Lenders don't just test at today's rate - they "stress test" at a higher rate (typically 5.5% or pay rate + 2%) to ensure you can afford payments if rates rise.
Why Tax Band Matters
Since mortgage interest relief changed in 2020, higher rate taxpayers get less tax benefit. Lenders therefore require a higher ICR (145% vs 125%) for higher rate taxpayers.
What is Top-Slicing?
If rent doesn't meet ICR requirements, some lenders will consider your surplus personal income to "top up" the shortfall. This can increase your borrowing power by 10-20%.