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Buy to let
mortgage calculator

Use our efficient calculator to determine how much you could borrow for a BTL property.

Find your new
buy to let mortgage

Our free buy to let mortgage calculator allows you to searche and compare the best BTL mortgage deals. Use it to find a new mortgage interest rate and check how much your monthly repayments could be 

Simply enter information such as property value, monthly rent, and how much you want to borrow. You can search for personal and limited company mortgage rates. An essential tool if you’re looking to purchase or remortgage an investment property. 

Let’s find a buy to
let
mortgage

Our easy-to-use buy to let mortgage calculator can help you find the best mortgage rate. It also shows you how much you will pay each month. All you have to do is give us a few details. 

Secure your buy to let mortgage in 5 steps

Step 1: Search rates with our BTL calculator

Use our calculator to search for the best mortgage rates and get an idea of the type of mortgage deal you could secure. Simply, submit a quote and one of our BTL mortgage brokers will call you back. Then, they’ll complete a more in-depth search for you on our bespoke BTL mortgage sourcing system. 

Step 2: Secure an agreement in principle (AIP)

Having completed a more in-depth search, our knowledgeable mortgage brokers will find you the most suitable deal and apply for that all-important AIP.  

An AIP, or decision in principle (DIP), gives you a solid idea of how much you can borrow. It’ll also tell you the type of mortgage interest rates you can access and whether a lender will accept your application at all.  

You can use the AIP to show estate agents and vendors that you’re a serious and credit-worthy applicant. 

Step 3: BTL Mortgage Application process

Once you’ve found a property, we can start the formal buy to let mortgage application process. This is when we’ll need to collect documentation from you, including: 

  • 3-6 months of bank statements 
  • Proof of identity (ID) such as a valid passport or driver’s licence 
  • Proof of income 

When we submit your application, an underwriter will review it, and a surveyor will value the property. If everything meets expectations, the lender should issue your formal mortgage offer within 4 to 6 weeks from application. 

Step 4: Conveyancing

With your mortgage offer secured, your solicitor can begin the necessary searches and legal paperwork. Your dedicated MFB Client Relationship Manager will stay in touch to make sure everything is proceeding smoothly and help resolve any issues should they occur. Your solicitor will let you know when to pay your deposit. 

Step 5: Completion

Once you’ve paid your deposit and all the legal work is complete, your solicitor will instruct your lender to release the funds. Congratulations – you now own a new buy to let investment property! 

How are buy to let mortgages calculated?

While every mortgage lender will have their own criteria for determining how much you can borrow, they all look at the following key factors when calculating a buy to let mortgage: 

Loan to Value (LTV) 

This is how much you are borrowing expressed as a percentage of the property value. Generally speaking, a lower LTV gives you access to more competitive mortgage interest rates and a higher LTV reduces the number of lenders available to you and usually increases the rates. 

The majority of buy to let lenders cap their maximum loan amount to 75%. This means that even if you meet affordability criteria to borrow more, the most amount of funding you could access will still be up to 75% of the property value. 

Rental Income 

Buy to let properties should be self-funding and your mortgage product should be affordable for your current circumstances. As such, the rental income should cover the mortgage interest repayments plus any additional costs associated with running the property. 

When lenders are stress-testing your affordability, they will typically use a ICR of 145% at payrate (the mortgage rate) for individual borrowers and 125% for Limited Companies.

How to compare BTL mortgage offers

There are three main things to consider when comparing buy to let mortgages, and the headline interest rate isn’t one of them!

Criteria – lender criteria vary enormously, so while you might be a textbook applicant for one, another wouldn’t even consider you! That’s why it’s best to start with the buy to let lenders that will consider you before you even think about mortgage interest rates.

Cost – the true cost of the mortgage is more important than the interest rate. While one product may have the lowest interest rate, it might have higher arrangement fees or additional fees that make it more expensive than a product with a slightly higher interest rate. Our bespoke buy to let mortgage sourcing system makes it easy for us to compare these costs for you.

Hidden fees – although less common now, some BTL mortgages have quirky additional terms, such as exit charges beyond the initial fixed-rate period. Our specialist mortgage experts will explain everything clearly and ensure you understand their recommendations before proceeding. Still, you and your solicitor must read over all the mortgage documentation before signing the mortgage offer. 

Frequently asked buy to let questions…

What is a buy to let mortgage?

A buy to let mortgage is a loan secured on a residential property with the specific aim of letting it out to tenants.

Do I need a buy to let mortgage to rent out a property?

Yes, you will need a buy to let mortgage in place to let out your property to tenants. If you let out a property on a homebuyer mortgage without the lender's consent, you may be in breach of your mortgage conditions. This could result in your lender calling the loan early. 

The only situations you wouldn’t need a buy to let mortgage for an investment property are: 

  • If you purchased the property outright with cash and don’t need a mortgage, or 
  • If your existing home mortgage lender formally permits you to rent the property. 

Get in touch with one of our expert brokers to discuss your options.

How much deposit do you need for a buy to let?

We recommend you have a minimum 25% deposit for buy to let investment. However, anything between 25-40% will get you access to the most competitive rates.  

Technically, the minimum deposit for buy to let property is 15%. You’ll find mortgage interest rates at 85% loan to value (LTV) quite expensive.  

You need more deposit for buy to let mortgages because lenders view them as a higher risk than mortgages on your home.  

What is the difference between a buy to let mortgage and a homebuyer mortgage?

Buy to let mortgages and the mortgage you have on your home have several differences.


Affordability calculations
Lenders assess buy to let mortgages based on the ability of the rent to cover the mortgage costs.

Lenders assess mortgage affordability for the property you live in based on your income after committed monthly outgoings.

However, your income will impact the affordability assessment of your buy to let mortgage. Your lender must be confident you could cover the mortgage repayments should your property stop generating rent.

Some lenders require a minimum income of £25,000, while others are more flexible.

 
Interest rates
Generally, buy to let mortgage interest rates are higher than standard home mortgages. This is because lenders consider them a higher risk.

 
Arrangement fees
Typically, lender arrangement fees for buy to let mortgages are higher than those for standard home mortgages. Sometimes, rather than a flat fee (e.g. £995), lenders charge BTL arrangement fees as a percentage of the loan amount. For example, 1% of the loan.

 
Conveyancing and valuation fees
As buy to let mortgages are more complex to secure, your solicitor/conveyancer may charge more than they would for your home mortgage. Property valuation fees are also usually more expensive.

 
Regulation
In the UK, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) regulate:

  • all mortgages on properties that you, the borrower, live in
  • the lenders that provide them


The rules set out by the FCA and PRA are to:

  • protect you, the borrower, from taking on unaffordable debt
  • ensure you receive fair and accurate advice
  • encourage competition within the mortgage market

The FCA does not regulate buy to let mortgages. This is because the main aim of renting out property is to make a profit (through rent and/or growth in property value). Therefore, lenders treat them as business transactions for regulation purposes.

At MFB, the advice you receive is fair and accurate regardless of the type of property finance you’re applying for.

What is a rent-to-interest (RTI) calculation?

You may know Rent to interest (RTI) as interest coverage ratio (ICR), debt service cover (DSCR) or “stress test”. Different lenders use different terms, but they all mean the same thing. 

Buy to let mortgage lenders use this calculation to ensure the expected rent will cover the mortgage interest and other costs associated with running your BTL property.  

Here’s an example of how RTI works: 

You rent a property for £1,500 per calendar month, which you own in your personal name. A lender will stress test this monthly rent at 145% at a 5-year fixed interest rate of 5.5%*. Based on this, you could borrow a maximum of £225,705. 

 If you owned the property in a Limited Company, the calculation would be 125% at 5.5%*. This means you could borrow a maximum of £261,818. 

 

 However, lenders don’t only consider whether you invest in your personal name or via a Limited Company. They will also consider: 

  • Whether you’re a basic or higher-rate taxpayer 
  • The type of property you’re mortgaging 
  • Your background property portfolio 

Each lender uses a slightly different calculation, so you might be able to borrow more from one than another. That’s why using our team of expert brokers is so valuable – we do all this time-consuming comparison work for you! 

 *Rates are for illustrative purposes only and may vary. 

 

How long should you borrow for?

Most BTL mortgage terms are 25 years. However, some lenders have restrictions around the age you can be when you apply, or how old you'll be when the mortgage term ends. Your plans for the property will also influence how long you borrow for. 

 A shorter mortgage term will reduce the amount of interest you pay on the capital loan. Our experienced buy to let brokers can help you determine what’s best for your circumstances. 

What is top slicing?

Some lenders can allow top slicing to help with affordability calculations. This is when you use personal income or rental income from your background portfolio to boost the RTI calculation. This will enable you to borrow more than if you relied on just the property’s monthly rental income. Not all lenders offer this, but our knowledgeable team can help you find the lenders that do if you need it. 

Capital or interest-only repayments?

Capital and interest repayments mean that each month, you repay part of the primary loan (the capital) and the interest charged by the lender. 

Interest-only repayments are when you only repay the interest charges every month. This means the capital loan does not decrease over time.  

Most landlords opt for interest-only buy to let mortgages, as it makes monthly repayments smaller, which can be better for cash flow. our lender needs to know how you will repay the capital loan at the end of the mortgage term when you apply. Typically, landlords sell the property or use proceeds from the sale of another to repay the capital at the end of the mortgage term. 

Lenders do offer capital and interest repayments for buy to let mortgages. Our experienced buy to let brokers can talk you through the options to help you decide the best repayment structure for you.  

Should I get a fixed or variable rate?

Whether you get a fixed or variable mortgage rate is a personal preference, but we can help you decide. 

With fixed-rate mortgages, your monthly repayments won't change during the initial fixed-rate period (e.g., 2 or 5 years). Many BTL investors prefer this, as it helps to budget. However, if interest rates decrease during that period, you can’t take advantage of the reduced rates. 

Variable and tracker mortgages typically follow the Bank of England Base Rate or the lender's standard variable rate (SVR). If interest rates change, your monthly repayments will change. So, one month, you could pay more than the month before, and the next, less. 

How long should I fix for on a buy to let mortgage?

Fixed-rate and discounted mortgage interest rates keep payments the same for a set period, e.g., 2,3,5 or 10 years. How long you want to fix for is a personal choice and can depend on your plans for the property and the surrounding interest rate conditions. If you’re unsure, speak to our BTL team, who can discuss the pros and cons in relation to your circumstances. 

How many buy to let mortgages can I have?

Technically, there is no limit. However, lenders do have limitations on:  

  • The amount of borrowing across your portfolio (either with them or with other lenders) 
  • The number of mortgaged properties you have in the background (either with them or with other lenders) 
  • The total loan to value (LTV) across your portfolio  

Essentially, the more mortgages you have, the greater the total debt you owe and, therefore, the higher your risk as a borrower. Our expert broker team know which lenders have which limits and what they are, so we can help you find the right lender. 

Talk to an expert

Have all the facts and figures you need to purchase or remortgage your home? Our experts will make the whole process easier for you! Give us a call or choose a convenient time for us to call you. Drop us an email or chat with a human on our live chat.



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