buy to let mortgages
Buy to let Rental Calculator
Information on this page is for information purposes only. It is not intended as investment advice
Buy to Let Calculator
How much rent will you need to support a certain mortgage loan?
The answer to this question will depend on your situation and your preferred mortgage.
For example, if you are remortgaging an existing let property then you should be able to demonstrate that you can successfully let the property at a profit. This would be regarded as a lower risk situation and lenders may be prepared to lend more for a given monthly rent.
Mortgage lenders will tend to lend more if you opt for the certainty of a 5 year fixed rate.
Conversely a 2 year tracker rate would be regarded as more risky as you would be exposed to mortgage rate rises.
Mortgage lenders are more likely to be receptive to the remortgage of a let property where you are NOT increasing the borrowing.
A remortgage with additional borrowing is likely to require a higher level of rental income. This reflects the higher level of risk as perceived by the mortgage lenders
The calculators assume the mortgage is held in personal names and the property does not require a HMO licence
Buy to Let Rental calculator
This calculator is intended as a guide to your borrowing capacity. For a better view, please fill in the Your Enquiry form
Please select the type of Mortgage you are interested in from the drop down menu…
What if the rent target is not achievable
If this is a purchase, then you should consider carefully whether this makes sense.
Bear in mind you will need to allow for letting agent fees
…and you will need to put aside money for taxation. There may not be much left over!!
If you are still keen to buy, then it may be possible if your personal income is sufficient to comfortably cover your existing commitments plus the new loan. Please contact us to discuss.
Are you a higher rate taxpayer
You will be taxed as a higher rate taxpayer if your total income exceeds £50,271 (2024/2025)
Your income will include rental income from any let properties you hold.
So if your earned income is £40,000 pa and you own two let properties generating rental income of £20,000 then you would be classed as a higher rate taxpayer
If you hold some properties in joint names then you can divide the rental income between the property owners.
If you are an existing landlord you should be declaring your rental income to the Inland Revenue. You should receive an annual statement (SA302) showing your taxable income. This statement should show if you are paying higher rate tax
Why can you borrow more as a lower rate taxpayer?
Your income tax situation will affect how much you can borrow
All landlords will receive basic rate income tax relief on their interest only mortgage payments but higher rate taxpayers will be paying higher income tax rates on the gross rental income.Â
Mortgage lenders take a view that the rental income ought to be higher for higher rate taxpayers to compensate landlords for the higher taxation
How much can you borrow based upon a certain monthly rent?
The amount you can borrow will be based upon your situation – are you buying or remortgaging. Are you capital raising? These are all factors that will affect the overall borrowing.
In addition, mortgage lenders will consider the rental income as well as the mortgage type and the applicant’s tax status
The maximum loan will also be restricted by Product loan to value limits.
These calculators should be regarded as a guide
You should contact us by filling in the Your Enquiry form to establish how much you can borrow
Buy to Let Maximum loan Calculator
This calculator is intended as a guide to your borrowing capacity. For a better view, please fill in the Your Enquiry form
Please select the type of Mortgage you are interested in from the drop down menu…
And finally....
For personal advice and tailored solutions, feel free to contact us at Mortgages Direct. We will guide you through the process and help secure the best financing for your needs.
Remember, we don’t charge any fees providing your mortgage is at least £100k