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UK Buy-to-Let Mortgage & Yield Calculator 2026

Instantly see Gross & Net Yield, ROCE, whether your deal passes the PRA lender stress test, your full SDLT bill with the 5% surcharge, and a side-by-side Section 24 Personal vs. Limited Company (SPV) tax comparison.

🏠 Property & Mortgage
£
Deposit25% (£62,500)
Mortgage Interest Rate4.8%
💷 Rental Income & Ownership
£
📋 Ongoing Costs
🧾 Upfront Costs
SDLT (Stamp Duty): calculated automatically below, including the 5% additional-property surcharge on every band.
🏦 PRA Lender Stress Test
Stress Test Interest Rate5.5%
Actual lender criteria vary — some treat Ltd Co SPV borrowing at 125% ICR, others at 145%. Confirm with a mortgage broker before offering on a property.

How to Use This Calculator

Enter your purchase price, drag the deposit slider (this sets your loan-to-value automatically), and set the mortgage rate. Toggle between Interest-Only — the standard structure for most UK BTL mortgages — and Repayment, which adds an amortising monthly payment and a debt payoff curve. Enter your expected monthly rent and ongoing costs (letting agent %, void weeks, maintenance %, insurance), and every KPI updates instantly: Gross Yield, Net Yield, Monthly Net Cash Flow, and ROCE.

The PRA Lender Stress Test card checks whether your rental income clears the bank's affordability bar — pick 125% (typical for basic-rate personal or Ltd Co borrowing) or 145% (typical for higher-rate personal borrowing), set the stress interest rate, and see an instant PASS/FAIL with the maximum loan the rent actually supports.

Use Export CSV/Excel for the full breakdown, Export PDF for a formatted report, or head to the Section 24 Tax Comparison tab to see exactly how much more (or less) you'd keep holding the same property through a Limited Company instead of your personal name.

Want the full explanation?

What Section 24 actually changed for landlords, the difference between Gross Yield, Net Yield and ROCE, exactly how lenders run the ICR stress test, and how the 5% SDLT surcharge is calculated — explained for students, professionals, and retirees alike.

Read the Full Guide →

Disclaimer: This calculator is provided for general educational purposes only and does not constitute mortgage, tax, or investment advice. UK tax rates, SDLT bands, and lender criteria change and vary — always verify current figures with HMRC, the PRA, a mortgage broker, or a qualified accountant before making a property investment decision.

⚖️ Tax Assumptions
SPV Corporation Tax Rate19%
19% applies to profits ≤£50,000; 25% applies above £250,000, with marginal relief between (effective ~19–25%). Using figures from the BTL Calculator tab: rent, costs and mortgage interest carry over automatically.
📜 What Is Section 24?
Section 24 of the Finance (No. 2) Act 2015, phased in from 2017-2020, removed a landlord's ability to deduct mortgage interest as a business expense when a rental property is held in a personal name. Instead of deducting the full interest cost before calculating tax, landlords now calculate tax on the full rental profit (before interest) and then receive a flat 20% tax credit on the interest paid. For a basic-rate (20%) taxpayer, this change is broadly neutral. For a higher-rate (40%) or additional-rate (45%) taxpayer, it can push their effective tax rate on rental profit well above their normal income tax band — sometimes over 100% of real profit in extreme, highly-leveraged cases — which is exactly why so many higher-rate landlords have shifted new purchases into Limited Company (SPV) structures, where mortgage interest remains fully deductible against Corporation Tax.
📊 Gross Yield vs. Net Yield vs. ROCE
Gross Yield is the simplest, roughest metric: annual rent divided by purchase price. It's useful for a first-pass comparison between properties but ignores every cost of actually running the property. Net Yield subtracts realistic ongoing costs — letting agent fees, void periods, maintenance, insurance — before dividing by price, giving a far more honest picture; a property advertised at an eye-catching 8% gross yield can easily work out to 4-5% net once real costs are included. ROCE (Return on Capital Employed) goes a step further still: instead of dividing by the full purchase price, it divides your actual annual cash profit by the cash you personally put in — deposit, SDLT, legal fees, refurbishment — which is what actually matters if you're using mortgage leverage, since it measures the return on your own money, not the bank's.
🏦 How Lender ICR Stress Testing Works
Since the PRA's SS13/16 supervisory guidance took effect, UK BTL lenders must check that a property's rental income comfortably exceeds its mortgage interest even if interest rates rise — not just at today's rate. The lender applies a hypothetical stress rate (typically 5.5%-8% depending on the deal) to the loan amount to estimate a "worst case" annual interest cost, then requires the rent to exceed that figure by a safety margin — the Interest Cover Ratio (ICR), usually 125% for basic-rate personal or Ltd Co borrowing and 145% for higher-rate personal borrowing. The formula: Maximum Loan = Annual Rent ÷ (Stress Rate × ICR). If your desired loan exceeds that maximum, the lender will typically reduce the loan size, request a larger deposit, or decline the application outright.
🧾 The 5% SDLT Surcharge
Anyone buying an additional residential property in England or Northern Ireland — including virtually all BTL purchases — pays a surcharge of 5 percentage points on top of the standard Stamp Duty Land Tax bands, on the entire purchase price (from the first pound, not just above a threshold). Combined with the standard bands, this produces effective BTL rates of 5% up to £125,000, 7% from £125,001-£250,000, 10% from £250,001-£925,000, 15% from £925,001-£1.5m, and 17% above £1.5m — each rate applying only to the slice of the price within that band, not the whole price at the top rate.