If you’re thinking of purchasing a buy-to-let property, it’s good to have as much information to hand before you get started. This is especially true if you’re getting a mortgage, and a buy-to-let mortgage calculator can give you a better idea of how much you might be able to borrow. With that in mind, we cover everything you need to know about buy-to-let mortgage calculators and how they can help with your property investment ambitions.
What is a buy-to-let mortgage calculator?
In short, a buy-to-let mortgage calculator gives you a better understanding of how much you might be able to borrow for an investment property purchase or remortgage. Indeed, few tools are more indispensable than an accurate calculator. Crunching the numbers on a potential property acquisition is important for any landlord or potential property investor wishing to tap into the buy-to-let market.
Why might I use a buy-to-let mortgage calculator?
A buy-to-let mortgage calculator often proves its worth for investors. It allows you to calculate how much you might be able to borrow as well as potential monthly mortgage repayments based on various interest rates. It can also be helpful for comparing different mortgage products so you have the most cost-effective option.
What information do I need to use a buy-to-let mortgage calculator?
The best thing about buy-to-let mortgage calculators is how easy they are to use. Before using one, you’ll need to know the buy-to-let property purchase price and how much you expect it to achieve in monthly rental income.
On top of that, you may be asked how much deposit you have, along with your annual income and expected monthly goings. At Molo, we ask for all of this information.
Are buy-to-let mortgage calculator results final?
No. While buy-to-let mortgage calculators can be particularly handy when it comes to giving you an idea of how much you can borrow, the results shouldn’t be taken as definitive. They are an assumption based on the information you enter into the calculator. To see how much you can borrow, you would need to start a full application, which may also be subject to a valuation later on down the line and the possibility of figures coming back lower, meaning less borrowing.
Just because a calculator isn’t definitive doesn’t mean it’s not worth using. It can give you an idea over affordability and how much you might be able to borrow. For that reason, it’s a helpful tool capable of giving you a better idea about your prospects of getting a buy-to-let mortgage and how much you can potentially borrow.
What is a good return on investment for a rental property?
The average UK yield for buy-to-let is 4.98%, according to internal data from Molo. Anything above this is generally deemed as a good investment, although there are other factors to consider. Capital appreciation is how much a property’s value increased over time and should be factored in when investing in a buy-to-let property.
In an ideal world, landlords want to achieve both high yields and strong potential for capital appreciation. You can use Molo’s rental yield calculator to get a better understanding of an area’s viability as a buy-to-let investment hotspot.
Where can I use a buy-to-let mortgage calculator?
There are many variations of buy-to-let mortgage calculators online, and we just so happen to have one here at Molo. Called the buy-to-let affordability calculator, we’ll ask you:
- Whether you’re applying as an individual or company
- Your UK annual income
- Average monthly outgoings (this is an optional extra)
- How much the property is worth
- The expected monthly rent.
Then we’ll combine all these factors to give an estimation regarding how much you might be able to borrow. The more information you provide, the more accurate the results.
How long does a buy-to-let mortgage calculator take?
Literally seconds. Once you’ve added the required information, the calculator will give you an instant result. But don’t take our word for it – check out Molo’s buy-to-let mortgage calculator to see how much you could potentially borrow.
Can I calculate the projected rental income?
Yes, there are plenty of calculators available to help you better understand how much you can earn from a rental property. They typically ask questions about your annual mortgage payments and property costs to give you an expected annual returns and gross yield.
Check out Molo’s rental income calculator to get an idea of how much your property could earn.
Final thoughts: calculations
Being able to see how much you can potentially borrow before starting the application provides more transparency and can help you make more informed decisions about a potential buy-to-let property. While these calculators aren’t definitive, they are helpful and can get the ball rolling on your buy-to-let property purchase.
