How much can I borrow?
Use our calculator below to get started with your property investment plans
Find out how much you can borrow
Use our calculator below to get started with your property investment plans.
Using our
calculator
Our calculator serves as a guide based on current market conditions. The results are based on how much rental income you will earn from a property, so it’s important to have a realistic idea of these for the most accurate results. Each lender has its own affordability assessments that decide how much you can borrow.
To calculate whether a property’s rental income will cover your mortgage repayments, lenders use RTI (Rent to Income) calculations. They will also want to see that you are left with surplus funds available to cover any property maintenance costs or financial emergencies.
Typically, lenders have set RTI calculations of 145% for Limited Companies and 125% for individuals, stress-tested at a lender's payrate or nominal rate. However, each lender will set its own calculations, so it’s best to discuss your options with a broker.
What if I need to borrow more?
Our calculator should be used as a guide only. For the most accurate results, speak to one of our expert mortgage brokers.
How much mortgage can I get?
Unlike homebuyer mortgages, where how much you can borrow is calculated based on your salary, buy to let mortgages are more complex to work out. Your lender applies what’s known as a rent-to-interest (RTI) cover calculation (also known as a ‘stress test’) to assess whether you will earn enough rental income to cover the interest on the mortgage.
Whilst RTI covers vary between lenders, generally, your rental income will have to equate to 145% of the monthly mortgage repayment for individual applicants and 125% for Limited Company borrowers. Lenders stress test Limited Companies more generously because Limited Companies pay Corporation Tax, which is less than the higher-rate Income Tax. Typically, this means Limited Companies have a smaller tax bill than higher-rate tax-paying landlords.
What is the mortgage borrowing criteria?
Like any other mortgage, buy to let lenders will have specific borrowing criteria for you to meet. You will need to put down a deposit, which is generally a minimum of 25% (or at 75% loan-to-value (LTV)). However, some lenders may allow you to put just 15% down.
Some lenders may have a minimum income of £25,000, which is separate from your rental income. What’s more, many will have maximum upper-age limits from the point of application. If you have concerns about lender age restrictions, speak to one of our expert brokers.
Meet your mortgage makers.
Talk to an expert
Have all the facts and figures you need to purchase or remortgage your home? Our experts will make the whole process easier for you! Give us a call or choose a convenient time for us to call you. Drop us an email or chat with a human on our live chat.
