Buy-to-let costs calculator
From gross rent to actual pocket — every landlord cost counted.
Illustration only, not financial or tax advice — lender criteria (usually 125–145% rent-to-interest cover), licensing and local rules vary. Check the net figure with the yield calculator before committing.
A buy-to-let’s entry costs start heavier than a home’s: the stamp duty additional-property surcharge adds 5 percentage points to every band in England — £11,500 on a £200,000 purchase instead of £1,500 — and buy-to-let mortgages typically require a 25% deposit, price about a point above residential deals, and are usually taken interest-only. Lenders also apply their own stress test: the rent generally must cover 125% (basic-rate taxpayers) to 145% (higher-rate) of the mortgage interest at a stressed rate of 5.5% or more, which caps borrowing regardless of your income.
The running costs are the difference between gross yield and reality: full management at 10–15% of rent, maintenance (5–10% of rent as a budget), landlord insurance, gas and electrical safety certificates, an EPC of at least band E to let legally (with government proposals to require band C for new tenancies around 2030 — a real capital-expenditure risk on older stock), voids of 2–4 weeks in a typical year, and service charges on flats. It is normal for these to absorb 25–35% of the rent before any mortgage interest.
Then tax, which is where post-2017 buy-to-let genuinely changed. Individual landlords can no longer deduct mortgage interest from rental profits — instead they receive a 20% tax credit on it (the “Section 24” rules), which means higher-rate taxpayers pay tax on money the lender took. On heavily mortgaged properties a paper profit can become a real loss after tax; this is why many landlords now buy through limited companies (interest fully deductible, but corporation tax, dividend tax and pricier mortgages instead), and why professional advice earns its fee here. Add capital gains tax on eventual sale at the residential rates, and the honest conclusion: buy-to-let can still work, but it works on the net number after every line above — never on the gross yield. Illustration, not advice.
Common questions
How much stamp duty do I pay on a buy-to-let?
In England, standard rates plus 5 percentage points on every band: £11,500 on a £200,000 purchase, £20,000 on £300,000 (2025/26). Wales applies its own higher LTT rates to additional properties. First-time buyer relief never applies to a purchase that completes as a rental investment.
What deposit do I need for a buy-to-let mortgage?
Usually 25% minimum, with the best pricing at 40%. Just as binding is the rental stress test: lenders want rent covering 125–145% of the interest at a stressed rate (typically 5.5%+), so a property renting at £900 a month supports roughly £140,000–£160,000 of borrowing regardless of your deposit or salary.
How does tax work on rental income now?
For individuals: rental profit is taxed at your income tax rate, and mortgage interest is not deductible — you get a 20% tax credit on it instead. A higher-rate taxpayer with £10,000 rent and £6,000 interest pays £4,000 − £1,200 = £2,800 tax, keeping £1,200 of a £4,000 “profit”. Limited-company ownership works differently; take advice for your situation.
What percentage of rent should I budget for costs?
Before the mortgage: typically 25–35% of gross rent — agent 10–15%, maintenance 5–10%, insurance and certificates a few hundred pounds a year, voids 4–8% (2–4 weeks), plus service charges on flats. Budgeting rent at 11 months of the year and costs at a third of it is a sensible first screen.
Is buy-to-let still worth it?
It can be, in the right conditions: strong local yields (say 6%+ gross), modest leverage, a long horizon, and either basic-rate tax status or a company structure that suits you. It struggles at low yields with big interest-only mortgages and higher-rate tax. Run this calculator’s net figure and compare it honestly against boring alternatives before committing six figures.
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