Buy to let: What is the minimum rent cover for a BTL mortgage?

Buy to let minimum rent to cover based on rent income

A rent cover stress test is where banks want mortgage interest payments to be less than rental income. Usually banks set ‘stress’ interest rates at 5.5% and want rent income to be equivalent of 145% of interest costs for individuals, or 125% for limited company mortgages.

Calculator: BTL rent cover

Buy to let: What is the minimum rent cover for a BTL mortgage?

Rent cover: How are you buying?

The buy to let property will be bought in my/our name

The buy to let property will be bought in a limited company name

Property price

£150000

£0£600000

Loan to value

75%

0%80%

Mortgage amount

Estimated monthly rent

£550

£100£3000

Rent cover if bought by a limited company. Default: 125%

Rent cover if bought by an individual. Default: 145%

Rent cover difference

Rent cover needed if bought by a limited company. Default: 145%

125%

0%200%

Rent cover needed if bought by an individual. Default: 145%

145%

0%200%

Assumed bank stress interest rate if a limited company purchasing. Default: 5.5%

5.5%

0%10%

Assumed bank stress interest rate if individual purchasing. Default 5.5%

5.5%

0%10%

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