Landlords & Property2 min check

Buy-to-Let Stress Test (ICR)

Most BTL lenders stress-test rent at 5.5% interest with an ICR of 125% (basic-rate) or 145% (higher-rate). This tool checks if your rent passes.

Short answer

BTL lenders apply an Interest Coverage Ratio (ICR) test: monthly rent must cover the stressed mortgage interest by 125% (basic-rate) or 145% (higher-rate / Ltd Co). Stress rate is typically 5.5%–7% even if your actual product rate is lower.

Step 1 of 20%

How it works

Required rent = (loan × stress rate ÷ 12) × ICR. If your real rent is below that, the lender won't lend the full amount you want. 5-year fixes are usually stress-tested at the pay rate, not the higher stress rate.

Worked example

£150k loan, 5.5% stress, 145% ICR (HR taxpayer) → required rent = (150,000 × 5.5% ÷ 12) × 1.45 = £997/month. Achievable at £1,100/m → passes.

Who should use this

•BTL buyers checking borrowing limits before offers
•Landlords remortgaging in higher-rate environment
•Investors weighing 2-yr vs 5-yr fixes (5-yr unlocks more borrowing)

Common mistakes

×Using the actual product rate instead of the stress rate
×Forgetting 145% ICR for HR taxpayers and Ltd Cos
×Assuming 2-year fix has same borrowing as 5-year (it doesn't)

Frequently asked questions

Why do 5-year fixes let me borrow more?▾

PRA rules allow lenders to skip the +2% stress test on 5-year+ fixes, so borrowing capacity goes up.

What if my deal fails ICR?▾

Increase deposit, choose a 5-year fix, increase achievable rent (HMO/serviced) or buy via Ltd Co at lower personal HR.

Is ICR the same as DSCR?▾

Similar concept — DSCR (US) usually includes principal too. UK BTL ICR is interest-only.

Related calculators

BTL Costs →Rental Yield →Mortgage Repayment →