How much can I borrow for buy-to-let?

Key points

• Buy-to-let lenders decide how much to lend mainly from the rent, not your salary.
• The year's rent must cover the year's interest, worked out at a test rate, by a margin: usually 125% for basic-rate taxpayers and companies, and 145% for higher-rate taxpayers.
• The test rate is your own rate on a fix of 5 years or more, or your rate plus 2 points on a shorter fix, and never below 5.5%.
• On our example, a £1,100 rent supports a loan of about £192,000 on a 5-year fix for a basic-rate taxpayer, but only about £130,000 on a 2-year fix for a higher-rate one.
• Lenders also cap the loan at a share of the price, usually 75%.

What is a buy-to-let mortgage?

It's a mortgage for a home you'll let to tenants rather than live in. The lender sizes it mainly on the rent, not your salary, and most lend up to 75% of the price, so you need a deposit of at least 25%. Most are interest-only: you pay just the interest each month and repay the loan when you sell or remortgage.

How do buy-to-let mortgages work?

• The rent sets the loan. The lender checks the rent covers the interest by a margin, at a test rate. That's the rent test below.
• Interest-only is the norm. The monthly payment is lower, but you still owe the whole loan at the end. Interest-only or repayment? compares the two.
• Fixed rates of 2 or 5 years are the most common, with an early repayment charge if you leave during the fix.
• Most aren't regulated by the Financial Conduct Authority, so you get fewer protections than on a home mortgage. The exceptions are letting a former home, which has some protection, and letting to family, which is regulated like a home loan.

Are buy-to-let mortgages more expensive?

Usually, yes. Rates tend to be a little higher than for a home mortgage with the same deposit, because lenders see letting as riskier. Arrangement fees are often bigger too, sometimes a share of the loan rather than a flat fee. A fee added to the loan counts as borrowing, so the rent has to cover its interest as well.

What is the rent test?

A buy-to-let lender asks one question above all: if rates rise, will the rent still pay the interest with room to spare? To answer it, they take the loan you want, work out a year's interest on it as if it were interest-only at a test rate (often called the stress rate), and check the rent is big enough. The margin they want is the interest cover ratio, or ICR.

Our example is the one all our guides use: a £180,000 house let for £1,100 a month, with a 75% loan of £135,000 at 5%, fixed for 5 years.

The rent covers the test interest 1.77 times. A basic-rate taxpayer needs 1.25 and a higher-rate one 1.45, so this loan passes for both.

Turn the sum round and you get the most the rent supports: the year's rent divided by the cover times the test rate. That's the figure lenders really work from, and the one our deal check shows as "Loan the rent supports".

What rate do lenders test at?

The Bank of England's rules for lenders ask them to allow for rates rising by at least 2 points over the first five years of a loan, and to assume at least 5.5%, unless the rate is fixed for five years or more. In practice most lenders test:

• A rate fixed for 5 years or more at the rate itself.
• A shorter fix, or a tracker, at the rate plus 2 points.
• Either way, no lower than a floor, usually 5.5%. Some lenders test a 5-year fix a little below it.

So the length of your fix changes how much you can borrow, often by more than the rate itself. 2-year or 5-year fix? goes into that choice.

Who counts as a higher-rate taxpayer? Lenders must allow for your tax on the rent, and since Section 24 most ask higher-rate taxpayers for the bigger margin. What counts is your salary or pension plus the rental profit before mortgage interest. Above £50,270 a year in total, you pay higher-rate tax. Some lenders ask everyone for 1.45; companies need 1.25, whoever owns them.

A worked example

Here's the loan the £1,100 rent supports for each kind of borrower, rounded down to the £1,000 below as the deal check does. The buyer wants £135,000.

The higher-rate taxpayer on a 2-year fix falls short. The lender would lend about £130,000, so they'd need about £5,000 more deposit. Fixing for 5 years instead, at the same rate, the rent would support about £165,000.

On a 5-year fix the rent supports more than the 75% loan whatever the buyer's tax rate, so the lender's cap of 75% of the price sets the limit, not the rent.

How much rent do you need?

A quick check before you view a property: multiply the loan by the cover and the test rate, then divide by 12. That's the lowest rent a lender will accept for the loan.

Lenders use their own surveyor's view of the rent, not the rent you hope for or the agent's asking rent. If the surveyor says £1,100 is optimistic, the loan shrinks.

If the rent falls short

• Fix for 5 years or more. The rent is tested at your own rate (if it's above the floor) instead of 2 points higher.
• Put down a bigger deposit. A smaller loan needs less rent. Buy-to-let deposit: how much do you need? works through it.
• Buy through a limited company. Lenders want 1.25 from a company whatever your own tax rate, though company mortgages often cost a little more. See Limited company or your own name?
• Ask about top slicing. Some lenders let spare income from your salary make up a small gap in the rent.
• Pay less, or find more rent. If the rent can't support the loan, the price may be too high for it. How much should I pay for a rental property? works back from the rent to a price.

What else lenders check

• Loan to value. Most buy-to-let lenders lend up to 75% of the price or their valuation, whichever is lower. A few go to 80% or 85%, at higher rates.
• The valuation. If their surveyor values the house below the price, the loan is worked out on the valuation and the gap comes from you.
• You. Many lenders want a minimum income from work or a pension, often around £25,000 a year, and some won't lend to a first-time landlord who doesn't own a home. Your credit record and your age at the end of the term count too.
• Fees added to the loan. They count as borrowing, so the rent has to cover their interest as well.
• Portfolio landlords. Once you have four or more mortgaged buy-to-lets, lenders must look at the whole portfolio: every rent, loan and cost, and usually a cash-flow forecast.

Common questions

Figures from our calculator, on the rules in force today, checked against GOV.UK and the Welsh Revenue Authority on 8 October 2026. Not financial or tax advice: check your own case with an accountant.