TL;DR
Estimate two common Buy to Let limits
The calculator estimates a rent-supported loan using an ICR and stress rate, then compares it with the selected maximum LTV. It shows the lower figure.
Lenders use different ICRs, stress rates, product rules and property criteria. The result is not a guaranteed loan or Decision in Principle.
Calculator / tool
Set your figures and see the estimate
How lenders assess Buy to Let borrowing
Many BTL lenders test whether expected rent covers stressed mortgage interest by a required percentage. They also cap the loan at a maximum LTV and assess the applicant, property, tenancy and valuation.
In this calculator the stress rate is set automatically: it is the BTL interest rate you enter plus 2 percentage points, with a minimum of 5.5%. The rental test uses interest only at that stress rate, not a capital-and-interest repayment. Lenders set their own stress rates, which can be higher or lower and can differ by product and fixed-rate period.
- ICR is the required rental-interest coverage.
- Stress rate is a notional rate used in the test.
- Maximum LTV limits the loan against property value.
- The lowest applicable limit normally controls the estimate.
Personal name, limited company and taxpayer status
Some lenders use different ICR or stress assumptions by tax band, ownership structure and product type. Limited-company lending is not automatically more suitable and needs separate mortgage, accounting and tax review.
What the maximum loan estimate does not include
The tool does not model lender affordability top-slicing, minimum income, portfolio-landlord rules, property restrictions, valuation rent, licensing, lease terms, credit profile, fees or underwriting.
Example maximum BTL loan
Using the calculator defaults: £1,200 monthly rent, a 5.5% BTL interest rate (which gives a 7.5% stress rate in this tool) and a 125% ICR, the rental test supports about £153,600. A 75% LTV on a £250,000 property allows up to £187,500, so the estimate is the lower figure, £153,600. That leaves a £96,400 deposit before purchase costs. These are illustrative inputs, not any lender's criteria.
- Property value
- £250,000
- Monthly rent
- £1,200
- BTL interest rate / stress rate
- 5.5% / 7.5%
- ICR
- 125%
- Limit by ICR
- £153,600
- Limit by 75% LTV
- £187,500
- Estimated maximum loan
- £153,600
- Deposit at this loan
- £96,400
Official sources
Frequently asked questions
What is ICR in Buy to Let lending?
Interest Coverage Ratio compares expected rent with stressed mortgage interest. A 125% requirement means rent must be at least 125% of the tested interest amount.
What is a Buy to Let stress rate?
It is a notional interest rate used to test rental coverage, not necessarily the pay rate. It varies by lender, product, deal period and applicant or ownership structure.
Why can another lender offer a different maximum loan?
Lenders use different ICRs, stress rates, LTV caps and property rules. Some may use top slicing, where surplus personal income can help cover a shortfall in rental coverage, while others will not.
Does taxpayer status affect the result?
It can. Some criteria distinguish basic-rate and higher-rate taxpayers or personal and limited-company applications. The calculator lets you select an ICR but does not determine the correct one for you.
Is this a guaranteed Buy to Let mortgage amount?
No. It is an estimate based on selected assumptions. Valuation, expected rent, credit profile, experience, income and full underwriting still apply.
Can a limited company borrow more?
Sometimes criteria differ, but a higher estimate does not make the structure suitable. Compare mortgage pricing, fees, tax, accounting and long-term plans with qualified advisers.