Buy-to-let mortgage stress test (ICR)
Whether the rent covers the interest at the rate a lender tests against — and the largest loan it will actually support.
The rent covers it. £950 against £688 of stressed interest is 138% coverage, against the 125% wanted — with £15,818 of headroom.
Stress rateASM | 5.5% |
Coverage requiredASM | 125.0% |
Most a lender would advanceEST | £165,818 |
Stressed interest on your loanEST | −£688 |
Coverage you achieveEST | 138.2% |
- Tested at 5.50% — the 5.5% minimum a lender must assume, because no product rate was given. A real product is stressed two points above its own rate.
- 125% coverage for a limited company (spv). Market convention — lenders differ.
- Interest only. A repayment mortgage needs more rent again.
- Gross rent, with no voids taken off. A lender uses the valuer's figure, not yours.
This is one sum out of a whole deal
Inside the app the same engines run against real HM Land Registry sold prices, rank your buyers against the deal, and tell you what to do next — with the workings attached to every figure, exactly as they are here.
The demo runs on invented deals and real postcodes. No account, nothing saved.
Questions
What is ICR?
The interest coverage ratio — the rent divided by the mortgage interest, tested at a rate higher than the one you would actually pay. UK buy-to-let lending is assessed on this rather than on your salary, which is why a good salary does not rescue a property with light rent.
Where do 125% and 145% come from?
Market convention, not regulation. The PRA requires lenders to take the borrower's tax position into account, and the market settled on roughly 125% for a company or basic-rate taxpayer and 145% for a higher-rate one. Individual lenders differ, so treat these as the shape of the test rather than your lender's answer.
Why is the stress rate higher than the rate I was quoted?
Because the lender is testing whether you could still afford it if rates rose. The PRA's statement sets a 5.5% minimum assumption and expects at least two percentage points above the pay rate. A fix of five years or more is the main exception — it can be assessed at the rate actually being paid.
Does this replace a broker?
No. It tells you before you offer whether the borrowing is plausible, which is the question that kills BRR deals late. What a specific lender will do with a specific case is a broker's job.
Next
Gross and net yield on total cash in — price, stamp duty, legals and refurbishment — not on the purchase price alone.
How much of your capital comes back out on refinance, and how much stays trapped in the deal.
Net yield on a house in multiple occupation, with the heavier operating costs an HMO actually carries.