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BTL Mortgage Stress Test Calculator
Check whether your rental income passes the lender's stress test — and find out exactly how much you can borrow on a buy-to-let mortgage.
Property & Rental Income
£200,000
75% — Deposit: £50,000
£1,000/month · £12,000/year
Lender Stress Test Criteria
4.5%
5.5%
145%
PASSES stress test
Your rent covers the mortgage at the stress rate
ICR at actual rate (4.5%)
177.8%
Need: 145%
ICR at stress rate (5.5%)
145.5%
Need: 145%
Maximum Borrowing
£150,470
Based on £1,000/month at 145% ICR & 5.5% stress rate
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How Does the BTL Mortgage Stress Test Work?
Buy-to-let lenders do not use the same affordability test as residential mortgages. Instead of looking at your income, they focus on whether the rental income covers the mortgage interest by a set multiple — the Interest Coverage Ratio (ICR).
Standard ICR rules: Most lenders require rent to cover mortgage interest by 125% if you're a basic rate taxpayer, or 145% if you're a higher rate taxpayer. They calculate this at a stressed rate (typically 5.0–5.5%) rather than the actual product rate.
Example: A £150,000 loan at a 5.5% stress rate costs £8,250/year in interest. At 145% ICR, you need annual rent of £11,963 (£997/month) to pass. If your actual rent is lower, the lender will reduce the maximum loan until the test passes.
Limited company loans: Some lenders apply 125% ICR to limited companies regardless of the director's personal tax position, which can give companies access to slightly higher lending amounts.
No voids. No management. No fees.
Guaranteed rent clears the stress test automatically
Because we pay you a fixed monthly rent, lenders see 100% rental coverage with zero voids. Many landlords find it easier to remortgage or refinance on a guaranteed rent agreement.
Frequently Asked Questions
What is the BTL mortgage stress test?
Buy-to-let lenders test whether your rental income covers the mortgage interest payments by a required multiple called the Interest Coverage Ratio (ICR). They calculate this at a stressed interest rate — typically 5.0–5.5% — rather than the actual product rate, to ensure the loan remains affordable if rates rise.
What Interest Coverage Ratio (ICR) do lenders require?
Most lenders require 125% ICR for basic rate (20%) taxpayers, meaning rent must be at least 125% of the monthly mortgage interest. Higher rate (40%) and additional rate (45%) taxpayers typically face a 145% requirement because Section 24 reduces their net rental income after tax.
What stress test rate do lenders typically use?
Most lenders stress test at 5.0% to 5.5%, regardless of the actual product rate you are offered. Some lenders use a pay rate stress test (the actual rate) — this is more common for limited company BTL mortgages and can increase the maximum loan available.
Can I get a BTL mortgage on interest-only?
Yes — most buy-to-let mortgages are arranged on an interest-only basis. This keeps monthly payments lower, which helps pass the ICR stress test. You will need a repayment strategy at the end of the term (typically selling the property or remortgaging). Some lenders also offer capital repayment BTL mortgages.
Does the stress test differ for limited company BTL?
Yes — many lenders apply 125% ICR to limited company (SPV) mortgages regardless of the director's personal tax position. This is because the company is the borrower and is not subject to Section 24. This can allow limited companies to borrow more on the same rental income than a higher rate taxpaying individual.
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