How the buy to let calculator works
- Total cash needed is your deposit plus stamp duty plus legal, survey and mortgage fees.
- Stamp duty uses the England bands. If you already own a home, a 5% surcharge applies to each band; if you are not UK resident, a further 2% applies. On a £200,000 purchase by an investor who already owns a home, that is £11,500.
- Monthly cash flow is the rent, less your running costs and the mortgage payment.
- Rental cover is the annual rent divided by the annual mortgage interest. Most buy to let lenders need 125% to 145%, tested at a stressed rate higher than the one you pay.
- Return on cash invested is your annual cash flow divided by the total cash you put in, before income tax.
For yield on its own, use our rental yield calculator. For other buyer types, such as first time buyers, use our stamp duty calculator. To see real figures, browse buy to let and off plan property for sale in Manchester, Liverpool, Birmingham and London.
Frequently asked questions
How much deposit do I need for a buy to let property?
Most buy to let lenders ask for a deposit of at least 25% of the price, and some products need 30% or more for the best rates. You also need cash for stamp duty, legal fees and mortgage fees, which this calculator includes in the total cash needed.
How much stamp duty do I pay on a buy to let property?
In England, a buyer who already owns a home pays a 5% surcharge on top of each standard stamp duty band when buying an additional property, and buyers who are not UK resident usually pay a further 2%. On a £200,000 buy to let, an investor who already owns a home pays £11,500. Our stamp duty calculator covers other buyer types.
How much can I borrow for a buy to let mortgage?
Buy to let lenders mainly look at the rent rather than your salary. Most need the annual rent to cover the annual mortgage interest by 125% to 145%, tested at a stressed interest rate, so the rental cover figure in this calculator is a useful first check. A mortgage broker can confirm what you could borrow.
Is buy to let still profitable?
It can be, but the margin depends on the price, the rent, your mortgage rate and your tax position. Landlords who own in their own name cannot deduct mortgage interest as a cost and get a 20% tax credit instead, which hits higher rate taxpayers hardest and is why many investors now buy through a limited company. Run your own numbers here, then take tax advice.
Should I use an interest only or repayment mortgage?
Most buy to let investors use interest only, which keeps monthly payments lower and cash flow higher but leaves the full loan to repay at the end. A repayment mortgage costs more each month but builds equity. Switch the mortgage type in the calculator to compare.
