Fiscalgrove
Calculators

United Kingdom calculators

UK

Choose your market

Rental Yield / Buy-to-Let Calculator

Work out your gross and net rental yield, monthly cashflow, and return on cash invested — plus a stress-tested view of cashflow if rates rise.

£
£
£

Insurance, maintenance, letting agent fees, void periods, etc.

£
%
years
£

Deposit plus purchase fees and SDLT — used to calculate your levered return (ROI).

%

Buy-to-let lenders typically test affordability at a higher "notional" rate (commonly ~7.5%) rather than your actual pay rate.

Gross yield6.00%
Net yield5.32%
Monthly cashflow£96.85
Return on cash invested (ROI)1.37%
Monthly mortgage payment£878.15
Annual cashflow£1,162.20
Stressed monthly cashflow (at 7.5%)-£81.76Stressed monthly payment: £1,056.76 — shows resilience if rates rise, similar to a lender's ICR stress test.

How this calculator works

Rental yield measures the income return a property generates relative to its value. Gross yield is the simplest measure:

Gross yield = (Annual rent ÷ Property value) × 100

Net yield subtracts your annual running costs (insurance, maintenance, letting agent fees, and similar) before dividing by property value, giving a more realistic picture. The calculator also works out your monthly cashflow (rent minus your mortgage payment minus running costs) and your ROI — annual cashflow as a percentage of the cash you actually invested (deposit, fees, and SDLT) — which reflects the effect of mortgage leverage rather than the unlevered yield. Finally, it recalculates your mortgage payment at a higher "stress" rate you can edit, mirroring how buy-to-let lenders test affordability against an Interest Coverage Ratio (ICR) — typically requiring rent to cover mortgage interest by around 125-145% at a stressed, notional rate (commonly ~7.5%) rather than your actual pay rate.

Worked example

Consider a £220,000 buy-to-let property let for £1,100 a month, with £1,500 a year in running costs, bought with a £143,000 mortgage (65% LTV) at 5.5% over 25 years, and £85,000 of cash invested (deposit, fees, and SDLT). Gross yield comes out at exactly 6.00%, and net yield at 5.32% once running costs are deducted. The monthly mortgage payment is about £878, leaving a monthly cashflow of roughly +£97 (about £1,162 a year) — giving an ROI of about 1.37% on the cash invested. Stress-tested at 7.5%, the monthly mortgage payment rises to about £1,057, tipping monthly cashflow to roughly −£82 — illustrating exactly why lenders stress-test buy-to-let affordability at a higher notional rate rather than the pay rate alone.

What affects your result

  • Purchase price vs achievable rent — the single biggest driver of yield; areas with lower property prices relative to rents tend to show higher yields.
  • Running costs — insurance, maintenance, letting agent fees, and void periods all reduce net yield and cashflow below the headline gross figure.
  • Mortgage rate and LTV — a higher rate or larger loan increases your monthly mortgage payment, squeezing cashflow even where yield looks healthy.
  • Cash invested — a smaller deposit increases leverage, which can raise ROI when things go well but also increases sensitivity to rate rises or void periods.
  • Interest rate changes — the stress test shows how resilient your cashflow is if you have to remortgage at a higher rate in future.

A note on accuracy

This calculator computes on full, unrounded figures and rounds only for display. It does not account for income tax on rental profit, the mortgage interest tax relief restriction for individual landlords (relief is given as a 20% tax credit rather than a full expense deduction), void periods beyond what you enter in running costs, or the buy-to-let Stamp Duty surcharge on purchase (see our Stamp Duty Calculator). Actual lender ICR requirements and stress rates vary by lender and product — always confirm current criteria with your lender or a mortgage broker. For general guidance, seegov.uk: renting out a propertyand MoneyHelper.

Frequently asked questions

How do you calculate rental yield?

Gross rental yield is your annual rent divided by the property value, shown as a percentage: (annual rent ÷ property value) × 100. Net yield goes further and subtracts your annual running costs (insurance, maintenance, letting agent fees, void periods) before dividing by the property value, giving a more realistic picture of what the property actually returns. On a £220,000 property renting for £1,100 a month with £1,500 a year in running costs, gross yield works out at 6.00% and net yield at about 5.32%.

What is a good rental yield in the UK?

There's no single 'good' number — it varies a lot by region and property type — but as a rough guide, many UK buy-to-let investors look for a gross yield above roughly 5-6%, with yields often higher in the North of England and lower in London and the South East, where property prices are higher relative to rents. A high yield alone doesn't guarantee a good investment either — it needs weighing against capital growth prospects, void risk, and how the numbers hold up once mortgage costs and running costs are factored in (net yield and monthly cashflow).

How much can I borrow for a buy-to-let mortgage?

Buy-to-let lending is based mainly on rental income rather than your personal income. Most mainstream lenders require the rent to cover the mortgage interest payment by around 125-145% (the Interest Coverage Ratio, or ICR), and — importantly — they usually test this at a stressed, higher 'notional' interest rate (commonly around 7.5%) rather than your actual pay rate, so the loan still looks affordable if rates rise. This calculator's stress-test field lets you see your cashflow at that notional rate, mirroring how a lender would check affordability, though you should confirm the exact ICR and stress rate with your lender or broker.

What is the difference between gross yield, net yield, and ROI?

Gross and net yield measure return on the full property value, unlevered — they ignore how the purchase was financed. ROI (return on investment) in this calculator measures your annual cashflow (rent minus mortgage payment minus running costs) as a percentage of the cash you actually put in (deposit, fees, and SDLT) — a levered measure that reflects how mortgage finance can amplify (or squeeze) your actual cash return compared with the unlevered yield.

Why does my cashflow look worse at the stress rate?

The stress rate models what your mortgage payment — and therefore your cashflow — would look like if you remortgaged at a higher interest rate, similar to how lenders check affordability isn't solely reliant on today's low rates continuing. It's common and expected for stressed cashflow to be lower, even negative, on properties that comfortably cash-flow at your current pay rate — that gap is exactly what the stress test is designed to reveal.

Related calculators

Mortgage CalculatorWork out your monthly repayment and total interest.Loan-to-Value (LTV) CalculatorCheck your LTV before applying for a mortgage.Stamp Duty (SDLT) CalculatorEstimate SDLT, including buy-to-let surcharges.