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Estimate buy-to-let property yield, tax under Section 24, and interest rate sensitivity.
Before personal tax; this fallback does not estimate tax.
| Item | Annual amount |
|---|---|
| Collected rent | £16,153.85 |
| Operating costs | -£3,465.39 |
| Mortgage interest | -£11,025.00 |
| Annual cashflow before personal tax | £1,663.46 |
Cashflow-only approximation; tax, fees and lender terms may change.
| Mortgage rate | Pre-tax cashflow estimate |
|---|---|
| Current (5.25%) | £1,663.46 |
| +1% (6.25%) | -£436.54 |
| +2% (7.25%) | -£2,536.54 |
| +3% (8.25%) | -£4,636.54 |
| Interest rate | Pre-tax cashflow estimate | Pre-tax yield estimate |
|---|---|---|
| 2.00% | £8,488.46 | 3.03% |
| 2.50% | £7,438.46 | 2.66% |
| 3.00% | £6,388.46 | 2.28% |
| 3.50% | £5,338.46 | 1.91% |
| 4.00% | £4,288.46 | 1.53% |
| 4.50% | £3,238.46 | 1.16% |
| 5.00% | £2,188.46 | 0.78% |
| 5.25%Selected input | £1,663.46 | 0.59% |
| 5.50% | £1,138.46 | 0.41% |
| 6.00% | £88.46 | 0.03% |
| 6.50% | -£961.54 | -0.34% |
| 7.00% | -£2,011.54 | -0.72% |
| 7.50% | -£3,061.54 | -1.09% |
| 8.00% | -£4,111.54 | -1.47% |
| 8.50% | -£5,161.54 | -1.84% |
| 9.00% | -£6,211.54 | -2.22% |
| 9.50% | -£7,261.54 | -2.59% |
| 10.00% | -£8,311.54 | -2.97% |
This local fallback is a pre-personal-tax cashflow illustration. Personal rental tax and purchase tax are not estimated here; do not use it for a filing or investment decision.
This tool estimates yield and cashflow using your inputs. Where the authoritative result is available, residential finance costs are modelled using the applicable UK Section 24 rules, where mortgage interest is generally treated as a basic-rate tax reduction rather than a direct deduction from rental profit.
A single yield figure can hide risk. Use the stress scenario and interest-rate sensitivity table to understand how sensitive the property is to rate changes and void periods.
Buy-to-let yields are calculated as annual rental income divided by property value (gross yield) or after all costs (net yield). Section 24 restricts mortgage interest relief to a basic rate tax credit (20%) rather than a deduction against rental income — this significantly increases tax for higher rate landlords. The mortgage illustration assumes interest-only borrowing and excludes loan fees, principal repayments, refurbishment and sale costs.
Higher-rate SDLT for additional dwellings uses the current statutory bands and depends on ownership and transaction details; it is not a flat 5% applied to every purchase. Capital appreciation is not included in this calculator's current return result and should not be treated as a forecast.
Exit tax depends on the gain, income, costs, reliefs, ownership structure and disposal date. BADR is not an automatic landlord relief, and incorporation can create SDLT, CGT, financing and legal consequences.
The official resources below are the source trail for the policy explanations. Check the current HMRC and GOV.UK guidance for your property and transaction.
These HMRC and government resources support the residential finance-cost, SDLT, LBTT, LTT, CGT and rental-property energy-standard explanations on this page. The calculator remains an estimate and does not confirm tax treatment, eligibility or investment suitability.