How do buy-to-let lenders decide how much I can borrow?

Buy-to-let affordability is usually based on rental cover, not your salary. The lender annualises the expected rent and divides it by a stressed interest rate multiplied by an Interest Coverage Ratio (ICR) — commonly 125% for basic-rate and limited-company borrowers, and 145% for higher-rate individual taxpayers because of Section 24 rules. This calculator shows the illustrative maximum loan the rent supports; the rent must be confirmed by an independent valuer and criteria vary by lender.

What is the ICR or rental cover ratio?

The Interest Coverage Ratio (ICR), or rental-cover ratio, is how much higher the rent must be than the (stressed) mortgage interest. A 125% ICR means the rent must be at least 1.25× the stressed interest. Higher-rate taxpayers are usually tested at 145%, while limited companies (SPVs) typically use 125%. HMOs, multi-unit blocks and holiday lets often use higher ICRs. Figures are illustrative only.

Buy-to-Let Rental Income Calculator (Rental Cover / ICR)

Buy-to-let lenders lend on whether the rent covers the mortgage with a safety margin — the rental-cover (ICR) test. This calculator shows the maximum loan the rent supports for basic-rate, higher-rate and limited-company landlords. Figures are illustrative and vary by lender.

For illustration purposes only

This calculator is a guide. The figures shown are illustrative and based only on the inputs you provide — they are not a quote, a mortgage offer, financial advice or tax advice. Buy-to-let stress rates and Interest Coverage Ratios (ICR) vary widely by lender and product, and the rent must be supported by an independent valuer’s assessment.

Speak to a qualified professionalStress rates and ICR thresholds vary by lender and circumstances — speak to an FCA-regulated mortgage adviser who places buy-to-let cases to confirm the real figures.

Tax mattersHow buy-to-let income is taxed, and whether you buy personally or through a company (Section 24), has major tax consequences — get advice from a qualified accountant or tax adviser.

Niche Advice Limited accepts no responsibility for any decisions made on the basis of this calculator. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority (FCA Reference: 750263). Niche Advice Limited is a credit broker, not a lender. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on a mortgage secured against it.

Stress rates, ICR thresholds and lender criteria change frequently, and your individual circumstances may produce different results.

Get advice from a whole-of-market specialist

This is a guide only. For figures tailored to you — with no upfront fees — request a callback from an FCA-regulated adviser.

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