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Rental Property Calculator

See whether a buy-to-let investment actually makes money once you account for mortgage costs, expenses, tax, and the Section 24 mortgage interest rules.

Purchase price or current market value
Gross monthly rent before any deductions
Outstanding loan balance (0 if buying outright)
Maintenance, insurance, letting agent fees, service charges
Your marginal income tax rate on other earnings
UK average has been around 3-5% long term
Gross yield5.3%
Net yield4.1%
Monthly cash flow-£319
Annual profit-£3,830

Monthly cash flow breakdown

Rental income+£1,100
Mortgage payment-£1,169
Running costs-£250
Net monthly-£319

Section 24 tax impact

Since April 2020, landlords can no longer deduct mortgage interest from rental income. Instead, you get a 20% tax credit on your interest payments. This means higher-rate taxpayers pay more tax on rental income than they used to.

Taxable rental income£10,200
Tax before credit£2,040
Section 24 credit (20%)-£2,000
Tax you owe on rental income£40/yr

As a basic-rate taxpayer, Section 24 has minimal impact on you. You pay 20% tax on your rental profit and get a 20% credit on your mortgage interest, which roughly cancel out. Your tax bill is effectively the same as the old system.

Stamp duty for buy-to-let

Additional properties attract a 5% SDLT surcharge on top of standard rates.

Standard SDLT£2,500
5% surcharge+£12,500
Total stamp duty£15,000(6.0% effective rate)

5-year total return estimate

Combining rental profit and capital appreciation at 3% per year.

Annual rental profit+£200Rent minus expenses and mortgage interest
Annual capital growth+£7,500At 3% growth on £250,000
5yr rental profit+£1,000
5yr capital growth+£39,819
5yr total return+£40,819

Projected property value in 5 years: £289,819. Annual total return: 3.1% on property value. These figures are before tax on rental income.