Buy-to-Let Mortgage Stress Test (ICR)
Check whether a buy-to-let mortgage passes the lender's interest-coverage stress test. Enter the rent, loan and pay rate, pick how you own it, and see the stressed ICR, the required threshold, a clear pass or fail, and the maximum loan the rent supports.
Your actual product rate. The lender stresses the higher of pay rate + 2% and 5.5%.
Companies and basic-rate individuals are stress-tested at 125%; higher and additional-rate individuals at 145%.
These figures are an estimate to help you compare deals, not financial or tax advice. Check the numbers with a qualified adviser before you commit.
Questions landlords ask
What is the ICR on a buy-to-let mortgage?+
The interest coverage ratio (ICR) is the rent divided by the mortgage interest, expressed as a percentage. Lenders want the rent to cover the interest by a comfortable margin, so a typical requirement is 125% or 145%. If the rent is £1,200 and the stressed interest is £800, the ICR is 150%.
Is the stress test 125% or 145%?+
It depends on your tax position. Limited companies and basic-rate individual landlords are usually stressed at 125%, while higher-rate and additional-rate individuals are stressed at 145% because Section 24 leaves them with less after tax. Set the ownership and tax band above to use the right threshold.
What stress rate do lenders use?+
For a mortgage the lender typically stresses at the higher of your pay rate plus 2% and a floor of about 5.5%, though five-year fixes are often assessed at the actual pay rate. This tool uses the higher of pay rate + 2% and 5.5%. Longer fixes can be assessed more generously, so treat the result as a conservative guide.
How much can I borrow on a buy-to-let?+
The rent has to cover the stressed interest at the required ICR, so the maximum loan is driven by the rent, the stress rate and the threshold, not just the property value. The calculator shows the largest loan the rent supports at your threshold - the lender will also cap you by loan-to-value, usually 75%.
Track the whole portfolio, not just one deal
Padlord keeps every property's yield, cashflow, equity, SDLT and compliance dates current, and shows the personal vs limited-company tax picture side by side.
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