Buy to Let Mortgage Calculator UK

As of 9 April 2026 (source: HomeOwners Alliance / L&C, updated daily): Best 5-year fixed BTL rate: 4.29% from The Mortgage Works. Best 2-year fixed BTL rate: 5.25% from Accord (fees £1,745). Best 3-year variable BTL rate: 4.25% from Newbury Building Society (fees £950).

Unusually, 5-year fixed rates are significantly cheaper than 2-year fixed rates in April 2026 — a market inversion reflecting lender expectations of short-term volatility but medium-term rate stability. For landlords who can lock in for 5 years, the pricing is currently compelling. Average 5-year BTL rates were 5.09% in February 2026 (Moneyfactscompare). Rates change daily — always compare total cost including fees with a whole-of-market BTL broker.

The ICR measures whether rental income sufficiently covers the mortgage interest cost. Lenders stress-test at a higher rate (typically 5.5–6.5%) regardless of the actual mortgage rate to ensure the loan remains affordable if rates rise. Most lenders require a 125% ICR for basic-rate taxpayers and 145% for higher or additional rate taxpayers.

Example: If a £150,000 loan at a 5.5% stress rate gives stressed monthly interest of £688, a 125% ICR requires minimum rent of £859/month, and a 145% ICR requires £997/month. If your projected rent falls short, you must either increase the deposit (smaller loan) or find a higher-yielding property. Our calculator shows your ICR and the maximum loan your rental income supports.

Buy to let properties in England attract a 5% additional property surcharge on top of standard SDLT rates, increased from 3% on 31 October 2024 under Rachel Reeves' Autumn Budget. This applies to all purchases where you already own (or part-own) another property.

For a £200,000 BTL: surcharge alone = £10,000 (5% × £200,000). Total SDLT = standard bands + surcharge = approximately £10,000 (as standard SDLT on £200,000 is £0). For a £300,000 BTL: standard SDLT = £5,000 (2% on £125,001–£250,000 + 5% on £250,001–£300,000) + surcharge £15,000 (5% × £300,000) = total £20,000. Scotland uses LBTT + 6% ADS; Wales uses LTT + 4% higher rates surcharge. No SDLT on remortgages of existing properties. Source: GOV.UK SDLT residential property rates.

For the right property at the right price with the right structure, buy to let can still deliver reasonable returns in 2026. The key factors are: strong gross yield (6%+ for meaningful cashflow on 75% LTV); conservative leverage to weather rate rises; correct ownership structure (personal vs limited company based on your tax position); understanding of the full cost picture (5% SDLT, EPC costs, Renters' Rights Act compliance); and realistic expectations about void periods and maintenance.

However, many landlords in lower-yield areas (particularly London with 3–5% yields) are cashflow-negative at current mortgage rates on standard LTV products. An estimated 93,000 BTL landlords exited the market in 2025 (source: HOA, citing Homenicom data). Those remaining tend to be more experienced, better-capitalised investors with diversified portfolios. Comparing BTL against pension contributions is worth doing — for higher-rate taxpayers, pension contributions offer up to 45% immediate tax relief with tax-free growth. Use our Pension Tax Relief Calculator.

Around 80% of new BTL purchases are now through limited companies (source: RM Mortgage Solutions, Feb 2026). The main advantages: full mortgage interest deductibility (avoiding Section 24); 19% corporation tax on profits up to £50,000; and greater flexibility for profit extraction timing. The main disadvantages: BTL mortgage rates on company products are 0.2–0.5% higher; annual accounting costs of £500–£1,500; profits extracted as dividends incur dividend tax (8.75%–39.35%); and existing properties cannot easily be transferred into a company without triggering SDLT and potential CGT.

Limited company ownership is generally most beneficial for: higher-rate taxpayers who will leave profits in the company to reinvest; landlords building larger portfolios; and those buying new properties (transfer costs make retrospective incorporation usually uneconomical). Basic-rate taxpayers often see minimal benefit. Professional tax advice from a specialist property accountant is essential before deciding. Source: Sterling & Wells (March 2026), MortgagePro.uk BTL calculator, SPV Investment Guide.

As an individual landlord, you can deduct from rental income: letting agent fees, insurance (building and contents), repairs and maintenance (not improvements), ground rent and service charges, accountancy fees, advertising costs, gas safety certificates and electrical inspections (EICR), council tax and utilities paid by the landlord, and travel costs for property inspections. You cannot deduct mortgage capital repayments or personal labour costs.

Mortgage interest is no longer deductible under Section 24 — instead you receive a 20% basic-rate tax credit. Capital improvements (rather than repairs) are not deductible but increase the cost base for CGT purposes on eventual sale. The CGT annual exemption is just £3,000 for 2026/27 (reduced from £12,300 in 2022/23). CGT rates on residential property sales are 18% (basic rate) and 24% (higher/additional rate). For more on tax planning see our Pension Tax Calculator which covers broader tax efficiency strategies.

The Renters' Rights Act in England takes effect from 1 May 2026 (source: Moneyfactscompare). Key changes: abolition of Section 21 "no-fault" evictions — landlords can only end tenancies using Section 8 with specified grounds; all tenancies become periodic (rolling) — no more fixed-term assured shorthold tenancies; landlords must join a government-approved private rental sector ombudsman; rent increases limited to once per year and challengeable via the First-tier Tribunal; and tenants get stronger rights around habitability and repairs.

Practical implications: possession proceedings will likely take longer and require stronger evidence. Landlords need to ensure properties meet all legal standards and are well-maintained to use possession grounds effectively. Factor additional management time and potential legal costs into your cashflow model. The Act applies in England — Scotland, Wales and Northern Ireland have their own (different) regimes. Source: Moneyfactscompare BTL guide, Landlord Studio BTL tax changes guide.