Buy to Let Maximum Loan Calculator

Use the buy to let maximum loan calculator below to compare the maximum mortgage loans that may be available to you from lenders using different rental coverage's between 120% & 130%. The calculator also helps you compare the rental yield, or income gain from the property against other investment returns.

Understanding the Buy to Let Maximum Loan Calculator

Buy to Let Mortgages are usually assessed based around rental coverage. This is usually defined as the percentage of the mortgage payment which is covered by the monthly unfurnished rental rate for the property. If the maximum rental was equal to the interest only mortgage payment for the property the rental coverage would be 100%.

Most buy to let lenders require rental coverage to be over 120%, 125% or for some lenders 130%. Based on the same mortgage interest rate this would therefore change the maximum loan available from one lender to another, and the calculator works out the maximum loan size on each level of rental coverage based on then maximum rent and mortgage interest rate.

As buy to lets are an investment, rental yield gives you a measure of the profitability of the property in cash terms as a comparison against a similar investment vehicle such as an ISA or Unit Trust. It's important to remember though the property itself increases in value too, so the rental yield would be similar to the dividend income received from an investment in shares, whereas the capital growth in property value would need to be compared against the capital growth of a share portfolio to assess both aspects of the properties return.