Mortgage Knowledge Base
When applying for a buy-to-let mortgage, lenders will consider both the rental income and affordability when assessing an applicant’s eligibility.
Rental cover calculation is an important part of this process and involves estimating the amount of rental income that can be achieved from a property. Lenders will typically look for a minimum gross rent figure of 125% of the monthly mortgage payment (interest only) to ensure that repayments are covered each month.
For example, if the monthly mortgage payment is £1,000 then the estimated rental income should be at least £1,250 per month in order to pass the affordability assessment.
