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Mortgage Calculators

How Lenders Determine Borrowing for Buy to Let Mortgages

For a buy to let mortgage you will need a minimum amount of income, usually £25,000. This is purely to show that you could pay the mortgage if the property was without a tenant.

The actual amount that you will be able to borrow will depend on the interest rate charged and the rental income that the property is expected to achieve (this is determine by a surveyor). Essentially, the lender expects the rent to cover the interest paid on the mortgage payments by a factor of 1.25. Finally, the lender sets a maximum loan to value, this is usually 85% for a buy to let mortgage.

 

Mortgage Balance (Capital & Interest Mortgage)
Buy to Let Calculator
Rental Income pm
*Interest Rate %
Term yrs mths
 

You may be able to borrow:
Value or Price must be at least:
 
Monthly Payment (Capital & Interest):
Monthly Payment (Interest Only, no capital is repaid):*
*Interest Only mortgages: if you want a repayment vehicle, why not consider an ISA or Pension to repay your mortgage?
Tip: Tax is payable on the profits from renting property. You may offset interest against rental income to reduce the amount of tax that you have to pay; if you choose a repayment mortgage then the amount of interest that you pay will reduce every year - that's not good. Better to choose an interest only mortgage as interest remains at the same level (subject to the rate charged).
Consider how you will repay the mortgage if you choose interest only.