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Buy-to-let

What is Interest Coverage Ratio (ICR)?

A buy-to-let test comparing expected rent with stressed mortgage interest.

Definition

A lender calculates mortgage interest using a selected stress rate and requires expected rent to cover a stated percentage of it. ICR percentages, stress rates, fixed-period treatments and top-slicing rules vary by lender, product, ownership and tax position; there is no single market-wide formula.

Practical example

At a 125% ICR, required rent equals 1.25 times the stressed monthly interest, but the lender may require a different percentage.

Why it matters

The rental test can limit the loan even when the deposit would support a lower loan-to-value.

Buy-to-let ICR calculator

Source and review

Reviewed 16 July 2026. Product criteria and rules can change.

Bank of England PRA: buy-to-let underwriting

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