Mortgage Brokers List
Buy-to-let stress test (ICR) calculator
Buy-to-let lenders size the loan on the rent, not your salary. Enter the rent and the loan to see the stressed rate, the rent a lender would need and the largest loan the rent supports.
How the stress test works
A buy-to-let lender checks that the rent covers the monthly interest with a margin, at an interest rate higher than the one you'll pay. The Prudential Regulation Authority defines this interest cover ratio (ICR) as the expected monthly rent divided by the monthly interest at the stressed rate (PRA SS13/16, para 2.3). The calculator works it out as:
- Stressed rate = your rate + 2 percentage points, and never below 5.5%. The PRA expects lenders to allow for a rise of at least 2 points over the first five years and to assume at least 5.5% (paras 2.12–2.14).
- Fixed for five years or more: the five-year look-ahead doesn't apply (para 2.12), so many lenders test at the pay rate. Some still add a margin; the calculator uses the pay rate, which is the most generous case.
- Rent needed = loan × stressed rate ÷ 12 × required cover.
- Largest loan = annual rent ÷ (stressed rate × required cover).
Why 125% or 145%
The PRA notes that "the current industry standard is to set the minimum ICR threshold at 125%" and expects lenders to allow for the tax the landlord pays, including the restriction on mortgage interest relief (SS13/16, paras 2.6–2.7). Individual landlords can no longer deduct mortgage interest from rental profit; since 6 April 2020 they get a tax reduction at the 20% basic rate instead (GOV.UK). A higher-rate taxpayer therefore keeps less of each pound of rent, so most lenders ask them for more cover, commonly 145%. Companies still deduct interest as a business cost (HMRC PIM2052), which is why limited-company buy-to-let is usually tested at 125%. These percentages are common lender practice, not a PRA rule: some lenders use other figures, and some let you top up the rent test with personal income (para 2.8).
Worked examples
| Rent, loan, rate | Cover needed | Stressed rate | Rent needed | Largest loan | Result |
|---|---|---|---|---|---|
| £1,250, £200,000, 4.5% 2-year fix | 125% | 6.5% | £1,354 | £184,000 | Short by £104 a month |
| Same, higher-rate taxpayer | 145% | 6.5% | £1,571 | £159,000 | Short by £321 a month |
| Same, higher-rate, 4.5% 5-year fix | 145% | 4.5% | £1,088 | £229,000 | Passes, £163 to spare |
| £900, £150,000, 3.2% 2-year fix | 125% | 5.5% (floor) | £859 | £157,000 | Passes, £41 to spare |
| £2,000, £300,000, 5% 2-year fix | 145% | 7.0% | £2,538 | £236,000 | Short by £538 a month |
The first three rows are the same property. Choosing a five-year fix moves the higher-rate taxpayer from £321 short to a pass, because the test runs at 4.5% instead of 6.5%. That is why five-year fixes are so common in buy-to-let, but check the early repayment charges before you lock in. In the fourth row the 2-point rule would give 5.2%, so the 5.5% floor applies.
If the rent doesn't cover the loan
- Put in a bigger deposit: the largest-loan figure tells you how much you can borrow on this rent.
- Look at a five-year fix, if the early repayment charges suit your plans.
- Ask about "top slicing": some lenders let your personal income make up a shortfall, after tax and your own spending (SS13/16, paras 2.8–2.10).
- If you're a higher-rate taxpayer, ask a tax adviser whether buying through a limited company makes sense for you. It changes far more than the stress test, including how you take the profit out.
Who the rules apply to
SS13/16 covers buy-to-let lending by banks and building societies to individuals and companies alike (para 1.5). Landlords with four or more mortgaged buy-to-let properties are "portfolio landlords" and face extra checks across the whole portfolio (para 3.1). Remortgaging with no extra borrowing is outside these rules (para 1.4), so a lender may not re-run the test when your deal ends. A "consumer" buy-to-let, such as letting a home you inherited or used to live in, is regulated by the FCA instead. The PRA republished SS13/16 in January 2026 with effect from 1 January 2027; the affordability rules above are unchanged.
Common questions
Is the rent figure the actual rent or the valuer's figure?
The lender uses the rent its valuer says the property would achieve, or an existing tenancy agreement (para 2.4). If you plan to charge more than the local market supports, the valuer's lower figure is the one that counts.
Does the stress test include repayment of the loan?
No. It tests interest only, even if you choose a repayment mortgage. Most buy-to-let mortgages are interest-only.
What counts as a higher-rate taxpayer here?
Lenders usually look at your total income including the new rent. If the extra rent will push you into the higher band, expect the 145% test.
More background: buy-to-let mortgage guide.
Sources checked 15 October 2026.
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Estimates only, not advice. These calculators do arithmetic on the numbers you enter. They don't check your credit file, apply a lender's affordability rules or know which products you qualify for. Nothing you type is stored or sent anywhere. For a figure you can act on, speak to an FCA-authorised mortgage adviser.