Rates & sources
Standard amortisation formulas used across UK lenders. Interest rates move daily — confirm with your lender or broker.
Source: Bank of England — Statistics — figures refreshed at the start of each tax year.
When to use this calculator
- Before comparing lenders, brokers, or repayment options.
- When you want to test how a different deposit, rate, or term changes affordability.
- When you need a quick estimate before using a formal quote or agreement in principle.
- When you are stress-testing your budget against a potential rate rise to see the impact on monthly payments.
- When you want to understand the full cost of borrowing — not just the monthly figure — before you commit.
A realistic South Africa planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Property Price (R)
R2,000,000
Monthly Rent (R)
6
Annual Costs (R)
R500
After entering these figures, review gross yield, net yield and annual rent together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.
How to read your results
Gross Yield
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Net Yield
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Annual Rent
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
This calculator estimates both the gross and net rental yield on a buy-to-let property. Gross yield is calculated as annual rental income divided by total property purchase cost, expressed as a percentage. Net yield additionally deducts estimated annual costs including mortgage payments, letting agent fees, landlord insurance, maintenance provisions, and a void allowance. UK-specific considerations include the restriction of mortgage interest tax relief for individual landlords to the basic-rate tax credit (introduced progressively from 2017), the higher stamp duty surcharge on additional properties, and potential letting agent licensing requirements that vary by local authority. The net yield figure in this calculator is pre-income-tax; your after-tax return will be lower depending on your marginal rate. Always seek advice from a qualified accountant familiar with property taxation.
Common mistakes
- !Mixing up loan amount and property value, which can distort affordability and LTV.
- !Using a headline rate but forgetting fees, insurance, taxes, or repayment type.
- !Testing only one term length instead of comparing the payment and total cost together.
- !Forgetting that a repayment mortgage and an interest-only mortgage produce very different monthly figures and total costs.
- !Not accounting for the impact of a rate revert after an introductory fixed period ends, which can sharply increase payments.
What to do next
- Run a second scenario with a higher rate or shorter term so you can see the downside clearly.
- Compare the result with an affordability or overpayment calculator before applying.
- Use the related guides below to understand trade-offs before you request live quotes.
- Note down the monthly payment and total interest for your two or three strongest scenarios so you have a clear comparison ready when you speak to a broker.
- Check whether making a modest overpayment each month would reduce total interest significantly — run the overpayment calculator next to find out.
Frequently asked
Use arrow keys to navigate items, Enter or Space to expand/collapse.
End-of-article next steps
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