How is Buy to Let Affordability Assessed?

Buy to Let Mortgage affordability is calculated by ensuring that the rent payable is over the minimum mortgage that will be required to be paid AND in most cases your personal income.

Their are three variables to formula mortgage lenders use - the Rent/the Loan, the Multiplier and the Rate.

Many lenders also require the applicant(s) to have a Minimum Income from there employment or self-employment.

NOTE: Some Lenders do not allow Rental Income to be included in Minimum Income calculation.

The Two Buy to Let Affordability Formulas

You can use the formula in two ways:

Rent to Max Loan Formula

Given the Rent you can achieve what is the maximum loan a lender will offer:

theRent (divide) theMultiplier (divide) theRate (multiply) 12 months

See it in action on Google.

Rent Required for Loan Formula

Given the Loan you want to borrow, what is the minimum rent a lender will require:

theLoan (divide) 12 months (multiply) theRate (multiply) theMultiplier

See it in action on Google.

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YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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The FCA does not regulate some investment mortgage contracts.

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