— Free UK Property Tool —

Buy-to-Let Rental Yield Calculator

Full BTL analysis in one place — gross yield, net yield, monthly cashflow, cash-on-cash ROI, Section 24 tax impact, and ICR lender stress test. Updated for 2026 SDLT rates.

Gross & Net Yield Section 24 Impact ICR Stress Test Monthly Cashflow Cash-on-Cash ROI Ltd Co vs Personal

Your Property Details

Property & Purchase
Purchase Price£
£
Higher SDLT rates apply
Usually companies and individuals who will own another dwelling at completion
Deposituse the selected product requirement
%
Purchase Legal Feescurrent quote
£
Survey / Valuationcurrent quote
£
Rental Income
Monthly Gross Rent£/month
£
Void Allowanceweeks/year empty
wk
Mortgage
Mortgage Rateuse a current product quote
%
Mortgage Termyears
yr
Interest-only mortgage
match the repayment basis in your quote
ICR Stress Ratetarget lender's criterion
%
ICR Referencetarget lender's criterion
%
Corporation Tax Rateuse your expected effective rate
%
Annual Running Costs
Letting Agent Fee% of rent, full management
%
Maintenance Reserve% of annual rent
%
Landlord Insurance£/year
£
Other Annual Costssafety certs, ground rent…
£
Tax
Effective Income Tax Ratesimplified marginal rate
%
Owned via limited company
Selected effective Corporation Tax rate; before extraction tax
How this calculator works — formulas & sources
Gross Rental Yield
Gross Yield = (Monthly Rent × 12) ÷ Purchase Price × 100%
A screening metric before expenses. There is no universal target: compare the result with current local achieved rents, voids, condition and comparable sale prices. HMO and single-let assumptions should be modelled separately rather than using a fixed uplift. HMO vs BTL
Net Rental Yield
Net Acquisition Yield = (Annual Rent − Annual Expenses) ÷ (Purchase Price + SDLT + Legal Fees + Survey) × 100%
Annual Expenses = Agent Fees + Maintenance + Insurance + Other Costs
Void allowance reduces effective annual rent before expenses are deducted. The denominator includes the fixed purchase-cost assumptions shown in the calculator; edit the Excel product for a fuller cost schedule. Stamp Duty (SDLT) Explained · Rent vs Buy Explained
Monthly Cashflow
Monthly Cashflow = (Net Annual Rent − Tax Liability − Annual Mortgage Cost) ÷ 12
Interest-Only: Annual Mortgage = Loan × Rate
Repayment: Monthly = L × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
Cashflow after mortgage and the simplified tax estimate. For repayment mortgages, the tax calculation now uses first-year declining-balance interest while cashflow uses the full scheduled payment. Section 24 Explained · Rent vs Buy Explained
Cash-on-Cash ROI
CoC ROI = Annual Net Cashflow ÷ Total Cash Invested × 100%
Total Cash Invested = Deposit + SDLT + Legal Fees + Survey
SDLT uses the selected standard or higher residential rates for England and Northern Ireland. For individuals, higher rates depend on ownership and replacement-main-residence conditions; companies generally pay them. The calculator excludes linked, mixed-use and unusual transactions. Stamp Duty (SDLT) Explained · HMO vs BTL
Section 24 Tax (Individual Landlords)
Property Profit = Effective Rent − Allowable Non-Finance Expenses
Tax Reduction Base = lower of finance costs and positive property profit in this simplified model
Tax Reduction = Base × 20%
HMRC also limits the finance-cost reduction by adjusted total income and permits unused finance costs to be carried forward. This quick calculator does not know your full income stack, so use the dedicated Section 24 calculator and professional advice for a tax return estimate. Section 24 Explained
Limited Company Tax
Taxable Profit = Effective Rent − Expenses − Mortgage Interest
Corporation Tax = Taxable Profit × selected effective rate
The 19% small-profits rate, marginal relief and 25% main rate depend on total company profits, accounting period and associated companies. Results are before salary/dividend extraction tax. Section 24 Explained · HMO vs BTL
ICR Stress Test
ICR = Scheduled Annual Rent ÷ (Loan × Entered Stress Rate)
Compare with the entered ICR reference
Replace both defaults with the target lender's current criteria. Product exceptions, rent evidence, top-slicing and use of personal income vary. Treat this as an affordability screen, not a mortgage decision. HMO vs BTL · Rent vs Buy Explained
Official sources: HMRC landlord finance-cost guidance · GOV.UK residential SDLT rates · Corporation Tax rates

Results

⬤ Calculating…
Gross Yield
—
scheduled rent before expenses
Net Yield
—
after running costs
Monthly Cashflow
—
after mortgage & tax
Cash-on-Cash ROI
—
return on deposit
Annual Tax Liability (est.)
—
—
ICR Stress Test —
0% 100% selected test 200%+
Compared with the stress rate and ICR reference entered above

Download the Full Excel Version

Includes Ltd Co vs personal comparison, scenario modelling, 5-year cashflow projection and full BTL analysis guide.

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How it works

Six metrics that tell you the full story

A headline yield figure hides the reality of buy-to-let. Here's what each metric means and why it changes your decision.

GROSS YIELD
The headline number

Gross yield is useful for a quick comparison but ignores every operating and finance cost. There is no UK-wide "good" threshold: use achieved local rents and comparable prices, then test voids, condition and management costs in the detailed inputs. HMO vs BTL

SDLT SURCHARGE
The extra stamp duty

The 5% higher-rate supplement usually applies when the transaction leaves an individual owning more than one dwelling; companies generally pay higher rates on residential acquisitions. Replacement-home and other transaction rules can alter the answer, so select the toggle only after checking GOV.UK guidance. Stamp Duty (SDLT) Explained · Rent vs Buy Explained

CASH-ON-CASH ROI
Return on your deposit

This divides modelled annual cashflow by deposit and purchase costs, including SDLT. Leverage can raise or reduce the result and increases financing risk. Use the output as a scenario comparison, not a target return. Stamp Duty (SDLT) Explained · HMO vs BTL

ICR STRESS TEST
The lender's test

Lenders commonly compare rent with stressed mortgage interest, but stress rates, thresholds, product exceptions and top-slicing policies vary. A result below the selected reference point is a prompt to check the target lender's criteria, not an automatic mortgage decision. HMO vs BTL

SECTION 24
The landlord tax trap

Individual landlords receive a basic-rate reduction on restricted residential finance costs. This page caps it by finance costs and property profit, but cannot apply the adjusted-total-income cap or carry-forward without your wider tax position. Use the dedicated Section 24 calculator for those inputs. Section 24 Explained · HMO vs BTL

NET YIELD
After running costs

Net acquisition yield deducts the entered running costs and void allowance, then divides by purchase price plus modelled SDLT, legal fees and survey. It excludes mortgage and tax, which appear separately in cashflow. Stamp Duty (SDLT) Explained · Rent vs Buy Explained

FAQ

Common questions

What is a good rental yield in the UK in 2026?
There is no universal UK target. A required yield depends on local achieved rents, property condition, voids, operating costs, finance, tax and the return needed for the risks taken. Compare like-for-like local evidence and stress-test the editable assumptions. HMO vs BTL · Rent vs Buy Explained
How does Section 24 affect my tax bill?
The Section 24 rules restrict finance-cost deductions for individual residential landlords and provide a basic-rate reduction. This page is a simplified estimate; the actual reduction is capped by finance costs, property profit and adjusted total income, with unused finance costs potentially carried forward. Section 24 Explained
Should I buy through a limited company to avoid Section 24?
Companies can generally deduct qualifying finance costs, but Corporation Tax is 19% for small profits and 25% at the main rate, with marginal relief between the limits. Finance, accounting and extraction taxes depend on the company and owner. Enter an effective rate and obtain advice before choosing or changing a structure. Section 24 Explained · HMO vs BTL
What is the SDLT rate for buy-to-let in 2026?
For England and Northern Ireland, higher residential rates add 5 percentage points to each standard band. They usually apply when completion leaves an individual owning more than one dwelling, and companies generally pay them. Check transaction-specific exceptions before selecting the toggle; Scotland and Wales use different taxes. Stamp Duty (SDLT) Explained · Rent vs Buy Explained
What is the ICR and why does my lender care about it?
ICR compares rent with stressed mortgage interest. Enter the target lender's stress rate and ICR reference; product exceptions, rent evidence and use of personal income vary. The output is not a mortgage decision. HMO vs BTL
How accurate is this calculator?
This calculator uses current England and Northern Ireland SDLT bands and the cost, finance and tax assumptions you enter. It does not reproduce a full tax return or lender underwriting. Actual liability depends on the complete tax position, and mortgage availability depends on product-specific criteria. Use current quotes and verify the result with qualified advisers. Stamp Duty (SDLT) Explained · Section 24 Explained