Buy-to-let stress testing and affordability
Lenders assess buy-to-let borrowing using an interest coverage ratio at a stressed rate, not the pay rate. Understanding the calculation tells you what you can actually borrow before you offer.
4 min read · Updated 2 August 2026
Overview
Lenders assess buy-to-let borrowing using an interest coverage ratio at a stressed rate, not the pay rate. Understanding the calculation tells you what you can actually borrow before you offer.
The calculation
Rent must cover mortgage interest at a stressed rate by a set ratio — commonly 125% for basic rate taxpayers and 145% for higher rate or company borrowers.
Why five-year fixes borrow more
Longer fixed rates are usually stressed at or near the pay rate, so the same rent supports a larger loan.
Top slicing
Some lenders allow surplus personal income to bridge a shortfall. It widens options but increases personal exposure.
Model your own stress test
Run each property at a materially higher rate than today's and check it still works before committing.
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This guide is general information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland — check your local requirements or take advice before acting.