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BTL Mortgage Stress Test
Will the rent pass the lender’s test? Check your rent against the stressed interest and coverage ratio, and see the most you could borrow.
- Lender stress test
- Coverage ratio
- Max loan
Indicative only. Built from published rules and the figures you enter; we do not guarantee accuracy or completeness, and this is not tax, legal or financial advice. Check with a qualified professional before relying on it. How accurate is this?
Our take
The stress test caps your loan, not the rent you collect
Lenders do not ask whether you can afford today’s payment; they test whether the rent covers interest at a higher notional rate, so the loan on offer can sit well below what the property could carry in real life.
Interest coverage ratios commonly run at 125% for basic-rate taxpayers and 145% for higher-rate taxpayers, often at a stress rate near 5.5%, while some five-year fixes are tested at their pay rate, so the same house supports different loans on different products.
The mistake is to use the headline asking rent, so enter what comparable homes actually let for, then rerun the test with a lower rent and a higher rate to see how much room you have.
The answer is a planning figure and not a mortgage offer, which a broker who knows each lender’s calculation can give, and once a deal works it is worth setting out in a pack that a lender or partner can read.
Our opinion, based on the official sources named above: general guidance, not regulated advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.
At 5.5% and 145% ICR the lender needs £997/month; you have £1,000 (100% of the requirement).
Required monthly rent
£997
Rent coverage
100%
Max borrowing on this rent
£150,470
This calculator is for guidance only and does not constitute financial, tax, mortgage or investment advice. Figures are estimates, always seek professional advice and verify costs before committing to a purchase.
BTL stress test: common questions
- What is a BTL stress test?
- Buy-to-let lenders check the rent covers the mortgage interest at a stressed (higher) rate by an interest coverage ratio, typically 125% for basic-rate or company borrowers and 145% for higher-rate taxpayers. If the rent falls short they’ll lend less.
- What stress rate should I use?
- Lenders commonly stress around 5.5%, or the pay rate plus 2%, though five-year fixes are sometimes stressed at the pay rate. Use your lender’s figure. This tool defaults to 5.5% as a sensible benchmark.
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