Buy-to-Let Mortgage & Yield Calculator (UK)
Calculate buy-to-let mortgage repayments, gross and net rental yield, Interest Coverage Ratio (ICR), and monthly cashflow for UK property investment.
Buy-to-Let Investment Guide
Yields and ICR Explained
Gross rental yield = (annual rent / property price) × 100. Quick benchmark only. UK averages: 4-6% gross yield. Higher (7%+) typical in low-price northern England areas. Lower (3-5%) in London and South-East. Net yield = (annual rent − all costs) / property price × 100. More accurate. Subtracts: mortgage interest, agent fees, insurance, maintenance, vacancy losses. ICR (Interest Coverage Ratio): lender stress test. Rent ÷ mortgage interest at stressed rate. Buy-to-let mortgages typically require
True Costs of Letting
Often overlooked costs: void periods. Even with full-time letting, expect 3-8 weeks unoccupied per year between tenants. Maintenance reserves: 1% of property value per year minimum (£250k house = £2,500/year). Big-ticket items (new boiler £2,500, new bathroom £5,000, roof repairs £3,000) come along every few years. Letting agent: full management 8-12% of rent. Plus tenant find fee (often 1 month's rent additional). Online-only agents: cheaper (£100-200 flat fees) but less hands-on. Landlord insu
Tax Treatment (Major Changes Since 2017)
Section 24 (since 2017): mortgage interest is NO LONGER deductible from rental income. Instead, a 20% tax credit is given. Massive impact on higher-rate taxpayer landlords — their effective tax rate on a leveraged property can exceed 100% of profit. For higher-rate taxpayers (£50,270+): only basic-rate relief on mortgage interest = 20%. Income tax then due at 40% on rental income BEFORE deducting interest. Net result: higher-rate landlord with £15k rent and £10k interest pays tax of £4k vs £2k p
Is BTL Still Worth It in 2024?
Honest assessment in current market: cash-flow positive BTL increasingly difficult with mortgage rates 5%+ and Section 24. Many leveraged BTL properties now break-even or negative cashflow. Better suited to: cash-rich investors (no mortgage). Limited company structures (especially for higher-rate taxpayers). Long-term capital growth bet rather than income play. Areas where rental yields exceed mortgage rates by clear margin. Worse for: highly-leveraged investors (75%+ LTV). Higher-rate individua
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