Buy To Let Investment Calculator Guide 2026
Work out rental yield, cash flow, return on your cash and stamp duty for a UK buy to let, then understand the tax and legal changes landlords face in 2026 and 2027.
Buy To Let Investment Calculator
Enter the property price, your mortgage and expected rent to see the upfront cash you need, your yield, annual cash flow and whether the rent is likely to pass a lender’s stress test.
Buy To Let Calculator
Interest-only mortgage assumed. Figures are before income tax.
Buy To Let at a Glance
What to check before you buy
Rental Yield
Annual rent divided by price. It is the quickest way to compare properties, but it ignores your mortgage and running costs.
Upfront Cash
Budget for the deposit, stamp duty with the 5% surcharge, and legal and mortgage fees. These often add 8% or more to the price on top of the deposit.
Lender Stress Test
Lenders test whether rent covers interest at a higher stress rate, commonly needing 125% cover for basic-rate taxpayers and 145% for higher-rate.
Tax and Rules Are Shifting
Section 21 ended on 1 May 2026, and property income tax rates rise by 2 percentage points from April 2027 in England, Wales and Northern Ireland.
How the Calculator Works
The formulas behind each number, so you can check the maths or rebuild it in a spreadsheet.
Rental yield
Gross yield compares a year of rent with the purchase price. Net yield first takes off the costs of running the property.
Cash flow and return on your cash
Cash flow is what is left after mortgage interest. Because most investors borrow, the return on the cash you actually put in is often more useful than yield.
Interest cover ratio (ICR)
Lenders check that rent comfortably exceeds mortgage interest, using a stress rate that is usually higher than the rate you will pay. This calculator uses 5.5% as an illustration. Your lender’s rate and required percentage may differ.
What is not included
Income tax on your profit, repayment mortgages, capital growth, rent increases, major refurbishment, and any letting agent fees charged at the start of a tenancy are not modelled. Treat the results as a first screen, not a forecast.
Buy To Let Stamp Duty Rates
England and Northern Ireland charge Stamp Duty Land Tax on each slice of the price, plus a 5% surcharge on the whole price for additional dwellings such as buy to lets.
| Portion of the price | Standard rate | Rate for a buy to let (with 5% surcharge) |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1.5 million | 10% | 15% |
| Above £1.5 million | 12% | 17% |
Buy To Let Metrics Explained
Each measure answers a different question. Use them together rather than relying on one headline figure.
| Metric | Formula | What it tells you |
|---|---|---|
| Gross yield | Annual rent ÷ price | A quick way to compare properties and areas. Investors often look at roughly 5% to 8%, but the right level depends on the area and risk. |
| Net yield | (Rent − running costs) ÷ price | A more realistic picture, because fees, voids, insurance and repairs are included. |
| Cash flow | Rent − costs − mortgage interest | Whether the property pays for itself each month before tax. |
| Cash-on-cash return | Annual cash flow ÷ cash invested | The annual return on the money you actually put in, including deposit and stamp duty. |
| Interest cover ratio | Rent ÷ (loan × stress rate) | Whether a lender is likely to approve the mortgage. Commonly 125% to 145%, depending on the lender and your tax band. |
| Loan to value (LTV) | Mortgage ÷ price | How much you borrow. Lower LTV usually means lower rates and a better chance of approval. |
| Break-even rent | Costs + interest ÷ 12 | The monthly rent needed to cover all costs. Below this, you are subsidising the property. |
Buy To Let Costs to Budget For
Deals often look better on paper than in practice because some costs are forgotten. Use this checklist.
Upfront Costs
Paid when you buy
- Deposit. Usually at least 25% of the price.
- Stamp duty. Includes the 5% surcharge in England and Northern Ireland.
- Legal fees and searches. Conveyancing for the purchase and mortgage.
- Survey and valuation. A landlord-focused survey is worth having.
- Mortgage fees. Arrangement and broker fees can be significant.
- Furnishing and repairs. Getting the property ready to let.
Ongoing Costs
Paid while you let
- Mortgage interest. Rates can change at the end of each deal.
- Letting or management fees. Commonly a percentage of the rent.
- Insurance. Landlord buildings, contents and rent guarantee cover.
- Repairs and maintenance. Set aside a sum each year.
- Safety certificates. Gas, electrical and smoke and carbon monoxide alarms.
- Void periods. Rent you do not receive between tenants.
- Service charge and ground rent. For leasehold flats.
Landlord Changes in 2026 and 2027
Rules and taxes for landlords have shifted quickly. These are the changes most likely to affect your returns.
1 May 2026: Section 21 abolished (England)
The Renters’ Rights Act 2025 ended no-fault evictions. Assured shorthold tenancies became periodic tenancies, and landlords must prove a legal ground under Section 8 to regain possession. The selling and moving-in grounds need four months’ notice and cannot be used in the first 12 months of a tenancy.
April 2026: Making Tax Digital begins
Landlords with qualifying income above £50,000 must now keep digital records and send quarterly updates to HMRC. The threshold is due to fall to £30,000 in April 2027.
6 April 2027: New property income tax rates
Property income in England, Wales and Northern Ireland will be taxed at 22%, 42% and 47%, two percentage points above the standard rates. The mortgage interest tax credit for individual landlords will rise from 20% to 22%. Scotland is excluded.
Proposed: Higher energy efficiency standards
The government has proposed a minimum EPC rating of C for rented homes by 2030. Older properties may need upgrades, so factor a possible improvement cost into your budget. Check the current position before you buy.
Buy To Let Calculator FAQ
Answers to the questions landlords and first-time investors ask most.
A buy to let investment calculator estimates whether a rental property is likely to make money. It works out the upfront cash you need, including deposit and stamp duty, then compares your rent with mortgage interest and running costs to show rental yield, annual cash flow, cash-on-cash return and interest cover.
Gross rental yield is annual rent divided by the purchase price, multiplied by 100. For a £200,000 property let at £1,000 a month, that is £12,000 divided by £200,000, which gives 6%. Net yield deducts running costs such as management fees, insurance, maintenance and void periods from the rent first.
There is no single benchmark because yields vary by region and property type. Investors often look for gross yields of around 5% to 8%, with higher yields more common in lower-priced areas. A high yield is not automatically better, as it can reflect higher risk, weaker demand or higher running costs.
Most buy to let lenders ask for a deposit of at least 25% of the purchase price, although a few accept 20%. A larger deposit usually gives access to lower interest rates and makes it easier to pass the lender’s rental stress test.
The interest cover ratio compares your annual rent with the interest on the mortgage, calculated at a lender’s stress rate rather than your actual rate. Lenders commonly ask for rent of at least 125% of the stressed interest for basic-rate taxpayers and around 145% for higher-rate taxpayers, although the exact stress rate and percentage vary by lender.
In England and Northern Ireland, buy to let purchases pay Stamp Duty Land Tax at the standard residential rates plus a 5% surcharge on the whole price. For a £200,000 property that comes to £11,500. Scotland charges LBTT with an Additional Dwelling Supplement and Wales charges Land Transaction Tax at higher rates.
Rental profit is added to your other income and taxed at 20%, 40% or 45%. Individual landlords cannot deduct mortgage interest as an expense and instead receive a tax credit worth 20% of the interest. From 6 April 2027, property income in England, Wales and Northern Ireland will be taxed at separate rates of 22%, 42% and 47%.
Yes, in England. From 1 May 2026 Section 21 no-fault evictions were abolished and assured shorthold tenancies became periodic tenancies. Landlords must now use Section 8 and prove a legal ground for possession, such as rent arrears, selling the property or moving in.
It depends on your circumstances. A company can deduct mortgage interest in full and pays corporation tax on profits, but limited company mortgages can cost more, and taking money out can trigger further tax. The stamp duty surcharge also applies to companies. Speak to a qualified tax adviser before choosing a structure.
You may. Gains on residential property are taxed at 18% or 24% depending on your income, after the annual exempt amount of £3,000. A UK residential property gain must generally be reported and the tax paid within 60 days of completion.