Rental Stress Test
Test whether rent covers the mortgage at lender stress rates (ICR).
Introduction
Who this is for: Buy-to-let investors checking a purchase will pass lender affordability.
Why it matters: Buy-to-let lending is governed by Interest Cover Ratio, stressed at a rate well above the pay rate. Most declined BTL applications fail here, not on credit. Basic-rate taxpayers usually need 125%; higher-rate borrowers typically 145%.
Typical scenario: A higher-rate taxpayer checking whether a £950 rent supports a £180,000 interest-only loan at 145% ICR.
- Testing at the pay rate rather than the lender’s stress rate (commonly 5.5% or pay rate +2%).
- Using the wrong ICR threshold for the borrower’s tax position.
- Assuming a limited company purchase uses the same ICR — it is usually more generous at 125%.
Inputs
Loan & Rent
Lender Criteria
Analysis
At a 5.5% stress rate, monthly interest is £825. Rent of £950 gives an ICR of 115% against the 145% required — fails. The rent supports a maximum loan of about £142,947.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Live Results
Achieved ICR
115.15%
Result
Fails
Maximum Loan Supported
£142,947
Rent Shortfall
£246