How this buy-to-let mortgage calculator works
The calculator subtracts your deposit from the property purchase price to estimate the mortgage amount. It then uses the interest rate and term to calculate monthly payments for the mortgage type you select.
What is loan-to-value?
Loan-to-value, usually shortened to LTV, compares the mortgage amount with the property value. A £187,500 mortgage on a £250,000 property has a 75% LTV.
LTV = (mortgage amount ÷ property value) × 100
Repayment and interest-only mortgages
With a repayment mortgage, each monthly payment covers interest and pays down some of the loan, so the balance is normally repaid by the end of the term if payments are made as agreed.
With an interest-only mortgage, monthly payments cover interest only. The original mortgage balance remains outstanding at the end of the term, so landlords need a credible repayment strategy.
Costs to allow for
Mortgage payments are only one part of a buy-to-let investment. When reviewing a property, also allow for:
- Stamp Duty Land Tax and purchase costs
- Letting-agent or property-management fees
- Maintenance, repairs, insurance and safety compliance
- Service charges and ground rent for leasehold properties
- Void periods, tax obligations and potential rate changes
Understanding the payment estimate
For a repayment mortgage, the monthly figure is based on a standard capital-and-interest repayment calculation. Early payments generally contain more interest than capital; over time, more of each payment goes towards reducing the loan balance.
For an interest-only mortgage, the monthly figure is the loan amount multiplied by the monthly interest rate. It does not reduce the mortgage balance, which is why the original loan remains due at the end of the term.
Frequently asked questions
What is a buy-to-let mortgage?
A buy-to-let mortgage is borrowing used to buy or remortgage a property that will be rented to tenants. Lenders usually assess the property, expected rent, deposit, applicant circumstances and their own lending criteria.
What is the difference between repayment and interest-only?
A repayment mortgage pays interest and gradually repays capital. Interest-only payments cover the interest only, leaving the original loan balance to be repaid at the end of the term.
What does loan-to-value mean?
LTV is the mortgage amount as a percentage of the property value or purchase price. Borrowing £150,000 on a £200,000 property is a 75% LTV mortgage.
Does this calculator include mortgage fees and property costs?
No. Allow separately for product fees, valuation fees, legal costs, taxes, insurance, maintenance, management fees and other property costs.
Can rental income affect a buy-to-let application?
Yes. Many lenders consider expected rent and may apply a rental-coverage or affordability assessment. The approach varies by lender and mortgage product.
Will my mortgage payment stay the same for the whole term?
Not necessarily. This calculator assumes the rate remains unchanged. Payments may change when a variable or tracker rate moves, or when a fixed-rate period ends and a new rate applies.