Rental Break Even Calculator
The rent, occupancy and interest rate at which the property stops making money.
Break-even monthly rent
£850
Headroom at current rent
£250
Maximum interest rate you can absorb
7.20%
Minimum occupancy needed
77.27%
Months per year you could afford empty
2.7
What this calculator tells you
Break-even analysis is stress testing in plain English. It tells you the rent below which the property costs you money, the interest rate at which it stops working, and how many empty weeks a year you can survive. Landlords who ran this calculation before 2022 were the ones who were not forced to sell when rates moved.
How it works
- 1Break-even rent = monthly mortgage interest + all other monthly costs.
- 2Headroom is the gap between the actual rent and that figure.
- 3The maximum sustainable interest rate is (annual rent − annual costs) ÷ loan × 100.
- 4Minimum occupancy is break-even rent ÷ actual rent — everything above it is your margin for voids.
Worked example
£150,000 borrowed at 5.2% with £200 of other costs
- Monthly interest: £650. Plus £200 = £850 break-even rent.
- At £1,100 rent the headroom is £250 a month.
- Maximum sustainable rate: (£13,200 − £2,400) ÷ £150,000 = 7.2%.
- Minimum occupancy: £850 ÷ £1,100 = 77%.
The property survives a rate rise to 7.2% and up to about eleven weeks empty a year. That is a reasonably resilient position.
Frequently asked questions
What interest rate should I stress test against?
Test at least two percentage points above your current pay rate, and at the rate you would revert to if you did nothing at the end of your fix. If the numbers fail there, plan now rather than at renewal.
Should I include capital repayment in break-even?
Only interest is a true cost — capital repayment is transferring money from one pocket to another. But if you are on a repayment mortgage the cash still has to be found, so check both figures.
Related content
These calculators give general estimates for UK private landlords and letting agents, not legal, tax or financial advice. Figures depend on your circumstances and on the rules in your part of the UK — check the detail or take advice before acting.