Buy To Let Stress Test Calculator

You can use our buy-to-let stress test calculator to calculate how much rental income is required to achieve a required loan amount, or what the maximum loan amount might be based on a known monthly rental income figure.

Calculate options based on buying personally or in a limited company, and for different product terms.

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    How to use our buy to let stress test calculator

    Our stress test calculator will help with 2 scenarios, firstly the maximum loan achievable, and secondly the rental income required to achieve a specific loan amount. For more detailed information on buy-to-let stress tests we recommend you read our rental stress test guide.

    To calculate maximum loan amount

    • Step 1 – please select ‘Maximum loan based on rental income’.
    • Step 2 – You will then be asked to enter the current or projected monthly rental income from the property
    • Step 3 – Select the applicable ICR rate
    • Step 4 – Select the length of the initial product term. For 5-year fixed rates and longer, select ‘5 years or more’. For all other product types, including tracker and variable rates, and fixed rates of less than 5 years select ‘less than 5 years’.
    • Step 5 – Enter the interest rate that you are looking to apply for.

    The calculator will then run the stress test based on the data input and show you the maximum loan amount available. (note that this is always subject to whatever the maximum loan to value (LTV) might be of the product applied for.

    To calculate the required rental income

    • Step 1 – please select ‘Rental Income required to achieve loan’.
    • Step 2 – You will then be asked to enter the loan amount required.
    • Step 3 – Select the applicable ICR rate
    • Step 4 – Select the length of the initial product term. For 5-year fixed rates and longer, select ‘5 years or more’. For all other product types, including tracker and variable rates, and fixed rates of less than 5 years select ‘less than 5 years’.
    • Step 5 – Enter the interest rate that you are looking to apply for.

    The calculator will then run the stress test based on the data input and show you what monthly rental income would be required to achieve the required loan amount.

    BTL Stress Test Interest Rates

    For both calculations, you will be required to enter an interest rate. If you are unsure of what rate to enter, you can view a selection of the latest rates by visiting the following pages. (will open in a new window)

    Visit any of the following pages for a selection of HMO Rates, Limited Company Rates, or Multi-Unit Block Rates.

    Buy To Let Stress Test Calculator – Input Required Details

    Please input your details below to see the required result.

    Interest Coverage Ratio (ICR)

    BRT = Basic Rate Taxpayer – select this if the property is to be owned personally and you are a basic rate taxpayer.

    HRT = As above, but if you are a Higher Rate Taxpayer

    Initial Product Term

    Fixed rates of 5-years or more will have more generous stress tests than short-term products, meaning the maximum loan achievable will be higher, or the rental income required will be lower than when compared to short term products. 

    Interest Rate

    Always enter the rate you wish to apply for.

    For 5-year fixed rates or longer, the ‘stress rate’ applied will be the rate entered, known as the ‘pay rate’. 

    For all other products, the stress rate applied will be the rate entered plus a margin of 2%, so for example, if the rate entered is 4.5%, the stress rate applied will be 6.5% (the calculator will do this). The actual margin will vary from lender to lender, but 2% is generally worst case. 

    Are there any other factors that can affect a buy to let stress test calculation?

    Yes, it’s important to understand the following factors can affect the specific calculation that a lender uses to run their stress test:

    Property Type – properties such as HMOs and Multi-Unit Blocks can attract higher ICR rates due to the higher yield these types of properties can produce. ICR rates for these types of properties can be up to 175%.

    Capital Raising – If you are remortgaging a property and looking to raise funds simultaneously, some lenders will increase the ICR.

    Short Term Product Margin – For short term products, such as 2-year fixed rates, lenders will typically apply a ‘margin’ or loading to the rate applied for, ranging from 1% to 2%. This margin is used for calculation purposes only and will vary from lender to lender, so you could have two lenders with the same 2-year fixed rate offering differing loan amounts.

    Due to high interest rates, buy to let stress testing has been a cause for concern for many landlords, but lenders are slowly reducing their stress rates to make funding more viable.

    Speak To A BTL Expert About BTL Stress Testing

    With thousands of buy-to-let mortgage products available at any one time and each product with a differing stress test requirement, it makes sense to speak to a buy-to-let expert to make sure you get the best deal.

    We can help you understand the numbers required and the options available to make your next investment property work for you.

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    Expert Advice - Zero Broker Fees

    We’ll never charge a fee for our services, including our initial advice and mortgage arrangements.

    If you have a quick question, want a better idea of the rates you might qualify for, or would like to apply for a buy-to-let mortgage, you can call us on 01604 212879 or request a call-back.

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    Next Base Rate Review - 21/03/2024 (Currently 5.25%)

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      Speak To A Buy-To-Let Mortgage Expert

      • 5-year Fixed Rates Offer Increased Loan Amounts
      • Top Slicing Available For Rent Shortfalls
      • Individual & Limited Company BTL Products

      Call us on 01604 212879 or request a call back

      Consent to contact you back (required)

      If you'd like to keep updated with latest rates and developments

      Updates To Lender Stress Test Calculations

      Molo Finance - 09/02/2024

      Molo have reduced stress rates for their 2-year fixed and tracker products across both UK resident and non-UK resident borrowers.

      Highlights:
      • 2-year Fixed Rates: Now calculated as the higher of pay rate, follow-on rate, or 5.50%.
      • 5-year Fixed Rates: Based on the pay rate.
      • Tracker Rates: Calculated as the higher of pay rate plus 2%, follow-on rate, or 5.50%.
      • Variable Rates: Now determined as the higher of pay rate plus 2% or 5.50%.