Buy-to-Let (BTL) Mortgage & Section 24 Calculator (2026)
Calculate UK Buy-to-Let (BTL) mortgage payments, ICR rental coverage stress tests (125%/145%), Section 24 tax liability, and net rental yield.
United Kingdom Calculator
Adjust Your Inputs
Move the sliders or type exact numbers. Results update instantly.
Instant Estimate
Your Results
Monthly Interest-Only Mortgage
£820
Based on your selected buy-to-let calculator assumptions. Try different sliders to compare scenarios.
Net Monthly Cash Flow (After Tax & Costs)
£84
Lender ICR Rental Stress Cover Ratio
162.91%
Annual Tax Payable (Section 24 or Corp Tax)
£3,951
Net Rental Yield on Purchase Price
5.92%
Total SDLT (Incl. 3% Surcharge)
£7,500
These calculations are financial projections and planning estimates, not tax, legal or licensed financial advice. HMRC 2025/2026 statutory rates, NI thresholds, and local council rates apply.
UK Stamp Duty (SDLT) Comparison Matrix
Compare Stamp Duty Land Tax across First-Time Buyers (£425k relief), Standard Home Movers, and Additional Property / Buy-to-Let buyers (including the 5% surcharge).
| Property Price | First-Time Buyer | Standard Mover | Second Home / BTL (5% Surcharge) |
|---|---|---|---|
| £200,000 | £0 (0%) | £0 (0%) | £10,000 |
| £300,000 | £0 (0%) | £2,500 (0.8%) | £17,500 |
| £400,000 | £0 (0%) | £7,500 (1.9%) | £27,500 |
| £500,000 | £3,750 (0.8%) | £12,500 (2.5%) | £37,500 |
| £600,000 | £8,750 (1.5%) | £17,500 (2.9%) | £47,500 |
| £750,000 | £25,000 (3.3%) | £25,000 (3.3%) | £62,500 |
| £1,000,000 | £41,250 (4.1%) | £41,250 (4.1%) | £91,250 |
First-Time Buyer SDLT Relief Rules
First-time buyers pay 0% Stamp Duty on properties up to £425,000, and 5% on the portion between £425,001 and £625,000. Crucially, if you buy a home for more than £625,000, you lose 100% of the relief and must pay standard rates on the full amount.
14-Day HMRC Payment Deadline
Stamp Duty must be submitted and paid to HMRC within 14 days of completion. Your conveyancer or solicitor typically handles this electronically, but you must have the cleared cash ready alongside your mortgage deposit.
How to Use the Buy-to-Let Calculator
Enter purchase price & deposit
Input the purchase price and deposit percentage (minimum 20% to 25% required by UK BTL lenders).
Specify rental income & mortgage rate
Enter expected gross monthly rental income and your fixed or variable interest rate.
Select ownership & tax structure
Choose between Personal Ownership (Basic 20%, Higher 40%, Additional 45%) or Limited Company / SPV (19%–25% Corporation Tax).
Review ICR stress test, Section 24 tax & net profit
See whether rental income passes the PRA 125%/145% stress test, your exact tax bill, and net monthly cash flow.
Formula & Calculation Methodology
Monthly Interest = Loan × Rate / 12 | ICR = Monthly Rent / (Loan × Stress Rate / 12) ≥ 125%/145%This calculator uses standard United Kingdom financial formulas, IRS thresholds, and amortization schedules. All results compute instantly in your browser with zero data stored or transmitted.
Calculation Examples & Scenarios
£250,000 BTL Property (25% Deposit = £62,500, £1,400 Rent)
£250,000 price, 25% deposit, £187,500 loan at 5.25%, £1,400/mo rent, £2,000 running costs, Higher Rate (40%).
Higher Rate Landlord vs Limited Company (SPV) Comparison
Same property owned in an SPV Limited Company paying 19% Corporation Tax.
High-Yield Regional BTL (£150,000 Purchase, £1,100 Rent)
£150,000 purchase price, 25% deposit, £1,100/mo rent, 5.0% mortgage.
Key Benefits
- Simulates Prudential Regulation Authority (PRA) ICR rental stress testing at 125% and 145% hurdles
- Accurately models Section 24 Finance Act restrictions (20% basic tax credit vs real profit)
- Directly compares personal ownership against Limited Company (SPV) Corporation Tax efficiency
- Calculates England & NI Stamp Duty Land Tax including the mandatory 3% second-property surcharge
Common Use Cases
- UK buy-to-let investors assessing whether a potential investment property satisfies lender ICR stress tests
- Higher-rate (40%) and additional-rate (45%) taxpayers deciding whether to incorporate into an SPV company
- Portfolio landlords planning annual tax reserves under Section 24 rules
Understanding Lender ICR Stress Testing (125% vs 145%)
UK mortgage lenders do not assess Buy-to-Let borrowing based on personal salary alone. Instead, under Prudential Regulation Authority (PRA) rules, lenders require rental income to cover mortgage interest by a specific Interest Cover Ratio (ICR) at a "stressed" interest rate (typically 5.0% to 5.5%).
For basic-rate taxpayers and Limited Company SPVs, lenders typically require 125% ICR coverage. For higher-rate (40%) and additional-rate (45%) personal taxpayers, lenders require 145% coverage to account for personal tax liabilities under Section 24.
Section 24 Mortgage Interest Restriction & The SPV Solution
Under Section 24 of the Finance Act 2015, individual landlords can no longer deduct mortgage interest from rental turnover before calculating taxable income. Instead, tax is levied on gross rental income minus basic running costs, with a basic-rate 20% tax credit applied to mortgage costs.
This means higher-rate landlords pay 40% tax on turnover while only receiving a 20% tax credit on financing costs. To avoid this, the vast majority of new BTL purchases are executed through Special Purpose Vehicle (SPV) limited companies, where 100% of mortgage interest remains fully deductible as a commercial business expense.
Frequently Asked Questions
The Interest Cover Ratio (ICR) is a stress test used by lenders to ensure rental income comfortably exceeds mortgage interest. For basic-rate taxpayers or Limited Company SPVs, lenders typically require 125% coverage at a stressed interest rate (often 5.0% to 5.5%). For higher-rate (40%) and additional-rate (45%) taxpayers, lenders require 145% coverage.
Under Section 24 (Finance Act 2015), private individual landlords can no longer deduct mortgage interest as a business expense before calculating tax. Instead, you pay tax on your entire rental turnover minus running costs, and receive a basic rate 20% tax credit. For higher-rate taxpayers, this dramatically increases the effective tax rate and can push landlords into a loss.
Limited companies (Special Purpose Vehicles) are exempt from Section 24 restrictions. A company can deduct 100% of mortgage interest as a standard business expense and pays Corporation Tax (19% to 25%) only on net commercial profit, allowing profits to be retained and reinvested gross.
Purchasers of additional residential properties in England and Northern Ireland pay a 3% Stamp Duty Land Tax surcharge on top of standard residential rates across every band.
Most UK Buy-to-Let lenders require a minimum deposit of 25% (75% Loan-to-Value), though specialized products exist with 20% down. A larger deposit (35%–40%) unlocks significantly lower interest rates.
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Related United Kingdom Guides
Buy-to-Let Mortgage ICR Guide: 125% vs 145% Stress Testing Explained
Understand how UK mortgage lenders calculate Interest Cover Ratio (ICR): PRA stress rates (5.0%–5.5%), minimum rent requirements for 125% (basic/SPV) and 145% (higher rate) landlords.
Section 24 Landlord Tax Rules: How Mortgage Interest Relief Restriction Works
In-depth explanation of Section 24: why landlords can no longer deduct mortgage interest as an expense, how the 20% tax credit works, and why higher-rate taxpayers can pay over 100% tax on real profits.
Buy-to-Let: Limited Company (SPV) vs Personal Ownership Tax Comparison
Evaluate whether to buy property personally or via a Special Purpose Vehicle (SPV) limited company: compare Section 24 exemption and 19%–25% Corporation Tax against dividend taxation and mortgage rates.