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, so check your local requirements or take advice before acting.