UK buy-to-let lenders do not give you one max-loan number — they give four, depending on your tax band and the product type. The Interest Coverage Ratio (ICR) test requires the rent to cover a stressed mortgage payment by a multiple that varies: 125% for limited companies and basic-rate individuals, 145% for higher-rate, 165% for additional-rate, and up to 175% for some HMO lenders. The stress rate is typically 5.5% for 2-year fixes or the pay-rate plus 1% for 5-year fixes (per the PRA SS13/16 framework). This calculator runs all four thresholds in parallel.
BTL Mortgage ICR Stress Test
Lenders don't give one number — they apply Interest Coverage Ratio (ICR) tests that vary by tax band and product. This calculator runs all of them in one matrix.
The standard market ICR is 125% for limited companies and basic-rate individuals, 145% for higher-rate and 165% for additional-rate, normally stressed at 5.5% (2-year fixes) or pay-rate +1% (5-year fixes). HMO and MUFB sit at 125–175% depending on lender.
ICR matrix
Each row is a different lender tier — ICR ratio × stress rate combinations the market actually uses.
| Scenario | Stress | ICR | Stressed pmt | Required rent | Max loan | Pass? |
|---|---|---|---|---|---|---|
| Ltd Co / basic-rate individual | 5.50% | 125% | £859 | £1,074 | £244,363 | Pass · 1.63× |
| Higher-rate individual | 5.50% | 145% | £859 | £1,246 | £210,658 | Pass · 1.63× |
| Additional-rate (conservative) | 5.50% | 165% | £859 | £1,418 | £185,123 | Fail · 1.63× |
| HMO / MUFB | 5.50% | 150% | £859 | £1,289 | £203,636 | Pass · 1.63× |
Max loan by scenario (chart)
Bars in teal pass at your target loan; amber means refinance won't fit at the chosen stress rate.
Rate-shock simulator
If lenders stress at +1, +2, +3 percentage points higher, here's how max borrowing collapses. Crucial when refinancing off a fix.
Max loan by scenario (table view)
Same data, sortable mental model.
Target loan: £187,500 · Monthly rent: £1,400
Stress test logic is interest-only basis (standard market practice). Lenders vary; defaults here reflect typical 2026 BTL underwriting. For binding decisions, consult a broker.
Frequently asked questions
Answers to the questions UK property investors most often have about this tool and the underlying rules.
- What is the ICR for a BTL mortgage in 2026?
- 125% for limited-company BTL and basic-rate individuals; 145% for higher-rate individuals; 145-165% for additional-rate individuals (lender-dependent); 125-175% for HMOs and MUFBs. These are PRA SS13/16 norms, in force since January 2017.
- What is the stress rate used for the test?
- 5.5% is the typical stress rate for 2-year and shorter-fix products. 5-year fixes often qualify for a softer stress at the pay rate plus 1% — sometimes just the pay rate — under the SS13/16 carve-out. Specialist HMO lenders may stress at 6.0-6.5%.
- What is top-slicing?
- Top-slicing is a feature offered by some lenders (Paragon, Precise, Aldermore among others) that allows surplus personal income to "top up" the rental coverage if rent alone fails ICR. If your rent covers 130% of the stressed payment when you need 145%, an extra £200/month of provable surplus personal income can bridge the gap. Set the "Monthly top-slicing" field to your evidenced surplus.
- Why does additional-rate ICR sit at 165% instead of 145%?
- Additional-rate landlords pay 45% income tax (plus the 22% property surcharge from 2027). Lenders test at the higher ICR because the after-tax cash retention is lower per pound of rent — more headroom is needed for the deal to remain sustainable under stress.