Buy-to-Let Mortgage Calculator for Landlords

Buy-to-Let Mortgage Calculator, stress-test, compare and plan

Financing is the lever that makes a buy-to-let property investment work or not. The free August Buy-to-Let Mortgage Calculator helps you size the loan, understand the monthly payment on interest-only or repayment products, and check lender-style coverage tests before you apply. Model rates, terms and fees in minutes. Ready to try August?

What this calculator does and why it’s different

Most mortgage widgets show a monthly payment and stop there. Ours goes further. It lets you:

• Compare interest-only vs capital-and-interest on the same inputs.

• Include product/arrangement fees paid upfront or added to the loan and amortise them sensibly across the fixed period to see the true effective cost.

• Run ICR/DSCR stress tests similar to those many UK lenders use, so you know if the rent supports the borrowing.

Core concepts in UK buy-to-let finance

• Loan-to-Value (LTV) - The loan as a percentage of the property value. Common bands are 60%, 70%, 75% and 80%. Lower LTV often means cheaper rates and easier coverage.

• Interest-only (IO) vs Repayment (C&I) - IO maximises monthly cash flow but you must have a repayment plan for the capital. C&I reduces the balance every month, building equity but raising the payment.

• Product/arrangement fee - Often a fixed amount or a percentage of the loan. Paying it upfront or adding it to the loan changes both cash in and the effective rate.

• Stress rate & ICR - Many lenders test rent against a stressed interest rate (for example, pay rate plus a margin) and require an Interest Coverage Ratio (ICR), typically between 125% and 145%, varying by borrower type and tax band.

• Early Repayment Charges (ERCs) - Apply during the incentive period. Useful to include in your downside planning if you may refinance or sell.

Payment and coverage

Monthly repayment (C&I) - Calculated using the standard amortisation formula over the term.
Monthly interest-only payment - Loan × Rate ÷ 12.

ICR (interest cover):
ICR = Annual Rent ÷ (Annual Interest at the lender’s stress rate)
If ICR is below the lender’s threshold, you may need lower LTV, higher rent, a different product, or (where permitted) top-slicing.

The calculator shows both payment and coverage so you can tune LTV, rent assumptions and product choices with confidence.

Worked UK example

• Purchase price £250,000; value also £250,000

• LTV 75% ⇒ Loan £187,500

• Product fee 2% (£3,750) added to the loan ⇒ £191,250 balance for IO example

• Interest rate 5.25% (fixed)

• Term 25 years

• Monthly rent £1,350

Interest-only payment: £191,250 × 5.25% ÷ 12 = £836.72/month
If on C&I: payment ≈ £1,133/month at 5.25% over 25y (illustrative).

ICR check (stress rate 7.00%):
Annual stressed interest = £191,250 × 7.00% = £13,387.50
ICR = £1,350 × 12 ÷ £13,387.50 = 121%
If your target is 125%–145%, options include reducing LTV, increasing rent with evidence, switching product, or adding personal income where a lender allows top-slicing.

In the calculator, switch the stress rate and LTV to see how fast ICR improves.

Fees, the quiet yield killer

Fees matter. A lower rate with a high fee can be more expensive over a short fixed period. The calculator lets you:

• Pay the fee upfront (this means lower monthly interest, but higher cash in).

• Add the fee to the loan (this means higher monthly interest, but less cash in).

• Amortise the fee across the fixed term to view a like-for-like effective cost per month, which makes product comparisons fair.

Inside August, tag the fee to the property so your ROI and cash-on-cash reflect the real cost of capital.

Portfolio landlord notes

If you hold four or more mortgaged properties, lenders may underwrite you as a portfolio landlord. Expect extra attention on your global ICR, experience, and document hygiene. August helps by keeping rent tracking via bank feeds, document storage, compliance checklist, smart reminders, maintenance requests, property insights and a AI property assistant all with your tenants on the app too.

From calculator to operating reality

• Plan vs Actual - Export your mortgage plan to August; we track live payments from bank feeds.

• Compliance guardrails - Gas, EICR, alarms, licensing and insurance reminders reduce avoidable lender issues at renewal.

• Evidence pack - Store ASTs, inventories, rent schedules and service-charge notices. Create clean lender or broker packs at renewal without digging through email.

Sensible assumptions for underwriting

Use conservative rent (evidence-based), include a void allowance, budget for service charge/ground rent on leaseholds, and remember Section 24 rules if you are an individual (interest relief given as a basic-rate credit). Companies may be taxed differently. Speak to a qualified adviser for your position.

How to use the August Buy-to-Let Mortgage Calculator

1. Enter value/purchase price and choose your LTV or loan amount.

2. Select product type (interest-only or repayment), rate, term and product fee (pay now or add to loan).

3. Add monthly rent and toggle stress rate & ICR to check coverage.

4. Compare products like-for-like using the effective monthly cost view.

Related August Calculators

1. Rental Cashflow Calculator

2. Rental Yield Calculator

3. Stamp Duty Calculator

4. Main calculators page

Disclaimer

This calculator provides estimates for information purposes only and does not constitute financial advice. Actual mortgage offers, rates, and repayments may vary. Always seek advice from a qualified mortgage adviser before making financial decisions.