A buy to let deal looks very different once stamp duty, buying costs, the mortgage and tax are included. This calculator puts one whole deal on a single screen so you can see what it really earns.
Enter the price, rent, deposit, mortgage rate and running costs. It works out stamp duty including the surcharge for additional homes, gross and net yield, monthly cashflow, a mortgage stress test, the tax under Section 24 and an overall deal score.
| Purchase price | £200,000 |
|---|---|
| Stamp duty (additional property, England) | £11,500 |
| Monthly rent | £1,100, so £13,200 a year |
| Gross yield | £13,200 ÷ £200,000 = 6.6% |
| Mortgage | £150,000 at 5% interest only, about £625 a month |
| Cashflow before tax and other costs | £1,100 − £625 = £475 a month |
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In England, buying an additional home adds a 5% surcharge to every band. On a £200,000 buy to let that comes to £11,500. Scotland and Wales have their own taxes and rates.
Start with the rent, then take off the mortgage, letting and management fees, insurance, repairs, empty months and any service charge. What is left is the cashflow before tax. The calculator then works out the tax so you can see the profit you keep.
Lenders check the rent would still cover the mortgage if rates rose, often by asking for rent of 125% to 145% of the interest at a higher test rate. The calculator shows whether the rent passes a test like this.
Yes, if you own the property in your own name. Mortgage interest can't be taken off the rent as an expense. Instead you get a tax credit of 20% of the interest, which matters most to higher-rate taxpayers.
Education, not advice. Rules change and depend on your circumstances. Check GOV.UK and speak to a qualified adviser before you act.