Buy-to-Let Mortgage Repayment Calculator: Monthly Costs Explained
Work out your buy-to-let repayment mortgage monthly costs with our free calculator. Includes sensitivity tables showing how deposit size, interest rate, and mortgage term affect payments, plus a full cash-flow test to check affordability before you commit.
Vincent Choi
UseLatch
Understanding your monthly mortgage payment is the single most important number in any buy-to-let investment decision. It determines whether a property generates positive cash flow, whether you pass a lender's affordability test, and ultimately whether the investment is worth making. Yet many landlords rely on rough estimates or headline rates rather than working through the actual figures.
This guide breaks down exactly how buy-to-let repayment mortgage payments are calculated, what affects them, and how to stress-test your numbers before committing to a purchase. We include worked examples, sensitivity tables, and a realistic cash-flow test that goes beyond the mortgage payment itself. If you want to run your own scenarios instantly, our free buy-to-let mortgage calculator does the maths for you.
Whether you are evaluating your first investment property or comparing financing options across a portfolio, the tables and examples below will give you a clear picture of what repayment mortgage ownership actually costs each month — and whether the rental income covers it.
TL;DR
A £150,000 repayment mortgage at 5.5% over 25 years costs £921 per month. Monthly payments are highly sensitive to interest rate and loan size — a 1% rate increase on a £150k loan adds roughly £45/month. Always model your full cash flow including insurance, management fees, and maintenance, not just the mortgage payment. Use our <a href="/tools/mortgage-calculator">mortgage calculator</a> to run your own numbers.
How Buy-to-Let Monthly Payments Are Calculated
Repayment mortgages (also called capital-and-interest mortgages) use a standard annuity formula to calculate your monthly payment. Each payment covers a portion of the interest owed that month plus a portion of the principal. In the early years, most of the payment goes toward interest. Over time, the balance shifts until the final payments are almost entirely principal repayment.
The annuity formula: M = P × [r(1 + r)n] / [(1 + r)n − 1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (term in years × 12).
Worked example: Suppose you borrow £150,000 at a fixed rate of 5.5% over 25 years. The monthly interest rate is 0.055 ÷ 12 = 0.004583. The number of payments is 25 × 12 = 300. Plugging these into the formula gives a monthly payment of £921. Over the full 25-year term, you will pay a total of £276,339 — meaning £126,339 goes to interest and £150,000 repays the loan.
On an interest-only mortgage with the same terms, you would pay only £688 per month (£150,000 × 5.5% ÷ 12), but you still owe the full £150,000 at the end of the term. The £233 monthly difference between repayment and interest-only is the cost of building equity. For a detailed comparison, see our interest-only buy-to-let mortgage guide.
What Affects Your Monthly Payment
Three variables control your monthly payment: the loan amount (which depends on the property price and your deposit), the interest rate, and the mortgage term. Changing any one of them has a measurable impact. The tables below use a base case of a £200,000 property with a 25% deposit (£150,000 loan), a 5.5% interest rate, and a 25-year term — giving a base monthly payment of £921.
Impact of Changing Your Deposit
A larger deposit reduces the loan and therefore the monthly payment. It also typically unlocks better interest rates, though that secondary effect is not shown here — these figures hold the rate constant at 5.5% to isolate the deposit impact.
| Deposit (%) | Deposit (£) | Loan Amount | Monthly Payment | vs Base Case |
|---|---|---|---|---|
| 15% | £30,000 | £170,000 | £1,044 | +£123 |
| 20% | £40,000 | £160,000 | £983 | +£62 |
| 25% (base) | £50,000 | £150,000 | £921 | — |
| 30% | £60,000 | £140,000 | £860 | −£61 |
| 40% | £80,000 | £120,000 | £737 | −£184 |
Impact of Changing the Interest Rate
Interest rate changes have a significant effect on monthly payments. A 1% increase from the base case of 5.5% to 6.5% adds £92 per month — over £1,100 per year. This is why stress-testing at higher rates is essential before committing to an investment.
| Interest Rate | Monthly Payment | vs Base Case | Annual Difference |
|---|---|---|---|
| 4.0% | £792 | −£129 | −£1,548 |
| 4.5% | £834 | −£87 | −£1,044 |
| 5.0% | £877 | −£44 | −£528 |
| 5.5% (base) | £921 | — | — |
| 6.0% | £966 | +£45 | +£540 |
| 6.5% | £1,013 | +£92 | +£1,104 |
Impact of Changing the Mortgage Term
A longer term reduces monthly payments but increases the total interest paid over the life of the mortgage. Extending from 25 to 30 years saves £69 per month but costs an additional £30,000+ in total interest.
| Term (Years) | Monthly Payment | vs Base Case | Total Interest Paid |
|---|---|---|---|
| 15 | £1,226 | +£305 | £70,613 |
| 20 | £1,032 | +£111 | £97,639 |
| 25 (base) | £921 | — | £126,339 |
| 30 | £852 | −£69 | £156,605 |
Monthly Payment Comparison Table
The table below shows monthly repayment amounts for common property prices and interest rates, assuming a 75% loan-to-value ratio and a 25-year term. Use it as a quick reference to estimate payments for your target property.
Repayment Mortgage — Monthly Payments
| Property Price | Loan (75% LTV) | 4.5% | 5.0% | 5.5% | 6.0% |
|---|---|---|---|---|---|
| £150,000 | £112,500 | £625 | £658 | £691 | £725 |
| £200,000 | £150,000 | £834 | £877 | £921 | £966 |
| £250,000 | £187,500 | £1,042 | £1,096 | £1,151 | £1,208 |
| £300,000 | £225,000 | £1,251 | £1,315 | £1,382 | £1,450 |
| £400,000 | £300,000 | £1,667 | £1,754 | £1,842 | £1,933 |
Interest-Only — Monthly Payments (Same Scenarios)
For comparison, here are the same scenarios on an interest-only basis. The difference shows how much of each repayment mortgage payment goes toward building equity.
| Property Price | Loan (75% LTV) | 4.5% | 5.0% | 5.5% | 6.0% |
|---|---|---|---|---|---|
| £150,000 | £112,500 | £422 | £469 | £516 | £563 |
| £200,000 | £150,000 | £563 | £625 | £688 | £750 |
| £250,000 | £187,500 | £703 | £781 | £859 | £938 |
| £300,000 | £225,000 | £844 | £938 | £1,031 | £1,125 |
| £400,000 | £300,000 | £1,125 | £1,250 | £1,375 | £1,500 |
On a £200,000 property at 5.5%, the repayment mortgage costs £921/month versus £688/month on interest-only — a difference of £233. That £233 buys you full ownership of the property after 25 years. For a deeper analysis of which approach suits your strategy, read our interest-only vs repayment BTL guide.
Can You Afford It? The Cash-Flow Test
Lenders use the Interest Coverage Ratio (ICR) to assess whether a buy-to-let mortgage is affordable: they check that the expected rental income covers the mortgage payment by at least 125% to 145%. But as a landlord, you need to go further than the lender's test. A property that passes the ICR can still lose money every month once you account for all the real costs of ownership.
Real-world example: Take a £200,000 property with a £150,000 repayment mortgage at 5.5% over 25 years. The monthly payment is £921. If the achievable rent is £1,100 per month, the gross surplus looks healthy at £179. But that is before deducting the costs that every landlord actually pays.
| Item | Monthly Amount | Notes |
|---|---|---|
| Rental income | £1,100 | Achievable market rent |
| Mortgage payment | −£921 | Repayment, 5.5%, 25 years |
| Gross surplus | £179 | |
| Buildings insurance | −£30 | Typical terraced/semi-detached |
| Management fees (10%) | −£110 | 10% of gross rent |
| Maintenance reserve | −£83 | ~7.5% of gross rent |
| Net monthly cash flow | −£44 | Loss after real costs |
This property loses £44 per month on a repayment mortgage despite passing a basic ICR check. The gross rental yield looks fine, but once you add insurance, management, and a sensible maintenance reserve, the cash flow turns negative. This does not necessarily mean it is a bad investment — you are building equity at £233/month — but you need to fund the shortfall from other income. On an interest-only mortgage, the same property would show a positive cash flow of around £189/month, which is why many landlords choose interest-only for tighter deals.
The lesson is clear: never assess affordability based on the mortgage payment alone. Run every potential investment through a full cash-flow model that includes insurance, management, maintenance, and void period allowances. Our mortgage calculator gives you the payment figure — the table above shows you how to build the complete picture around it.
How to Reduce Your Monthly Payments
If your cash-flow test shows a tight or negative result, there are several practical strategies to bring your monthly payment down without abandoning the investment.
- Increase your deposit. Moving from 25% to 30% deposit on a £200,000 property reduces the monthly payment from £921 to £860 — a saving of £61/month that also unlocks better rates from most lenders.
- Extend the mortgage term. Stretching from 25 to 30 years saves £69/month, though you pay more interest over the life of the loan. For cash-flow-sensitive investments, the lower monthly outgoing can make the difference between positive and negative cash flow.
- Shop for better rates. A 0.5% rate reduction on a £150,000 loan saves roughly £44/month. BTL rates vary significantly between lenders, so comparing products is essential. See our guide to the best buy-to-let mortgage lenders in 2026 for current options.
- Use a specialist BTL mortgage broker. Whole-of-market brokers access products not available directly to borrowers and understand complex scenarios like portfolio lending, limited company structures, and multi-unit freehold blocks. The broker fee (typically £300–£500) often pays for itself through a better rate.
- Consider interest-only for part or all of the term. Some lenders offer part-and-part mortgages where a portion of the loan is repayment and a portion is interest-only. This gives you partial equity building at a lower monthly cost than full repayment.
- Remortgage at the end of your fixed period. When your initial fixed rate expires, you will typically roll onto the lender's standard variable rate (SVR), which is almost always higher. Remortgaging to a new fixed deal before the SVR kicks in can save hundreds of pounds per month.
Total Cost Beyond the Mortgage
Your mortgage payment is the largest single cost, but it is not the only one. The following costs are easy to overlook when projecting cash flow. Budget for all of them from day one to avoid unpleasant surprises.
Buildings Insurance
Required by every mortgage lender. Covers structural damage from fire, flood, subsidence, and storms. Typical cost for a standard residential property.
£15–£40/month
Landlord Insurance
Covers landlord-specific risks: liability claims, loss of rent, legal expenses, and accidental damage by tenants. Not legally required but strongly recommended.
£20–£50/month
Management Fees
If you use a letting agent for full management, expect to pay 8–12% of monthly rent. On a property earning £1,100/month, that is £88–£132. Tenant-find fees are additional.
8–12% of rent
Maintenance Reserve
Budget 10–15% of annual rent for ongoing repairs, appliance replacements, and periodic redecoration. A boiler failure or roof repair can cost thousands if you have not set money aside.
10–15% of rent
Void Periods
No property stays occupied every day of every year. Budget for at least one month of vacancy per year (8.3%). In some areas or price bands, two months is more realistic.
Budget 1 month/year
Ground Rent & Service Charge
If the property is leasehold (most flats), you will pay an annual ground rent (£50–£400) and a service charge (£1,000–£3,000+/year) covering communal maintenance, buildings insurance, and management of common areas.
Leasehold only
Adding these costs together for a typical £200,000 property with £1,100/month rent: buildings insurance (£25), landlord insurance (£35), management at 10% (£110), maintenance reserve at 10% (£110), and void allowance at 8.3% (£91) totals approximately £371 per month on top of the mortgage. Combined with a £921 repayment mortgage, the total monthly cost of ownership is around £1,292 — well above the £1,100 rent. This is why understanding the full cost picture, not just the mortgage payment, is essential before buying.
Work Out Your Monthly Payments Now
Use our free buy-to-let mortgage calculator to model repayment and interest-only payments side by side. Enter your property price, deposit, rate, and term to get instant results — then stress-test at higher rates to see how your investment holds up.
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Get Started with LatchFrequently Asked Questions
What is a typical monthly payment on a £200k buy-to-let mortgage?
With a 25% deposit (£150,000 loan) at 5.5% over 25 years, the repayment is approximately £921 per month. On interest-only, the same loan costs £688 per month. Actual payments depend on your specific rate, term, and LTV. Use our mortgage calculator to model your exact scenario.
Is it better to overpay a buy-to-let mortgage?
Overpaying reduces the outstanding balance faster, which lowers the total interest paid and shortens the mortgage term. However, the cash used for overpayments could potentially earn a higher return if invested elsewhere — for example, as a deposit on another property. Overpaying makes most sense if you are on a variable rate (where each overpayment immediately reduces your interest charge) or if you plan to hold the property long-term and want to own it outright. Check your mortgage terms first, as many fixed-rate products charge early repayment fees of 1–5% on overpayments above 10% of the balance per year.
How do I calculate buy-to-let mortgage affordability?
Start with the monthly mortgage payment (use the annuity formula or our calculator), then subtract all operating costs: insurance (£50–£90/month), management fees (8–12% of rent), maintenance reserve (10–15% of rent), and void allowance (one month per year). If the achievable rent covers the mortgage plus all these costs with a surplus, the investment is cash-flow positive. Lenders also apply their own ICR test, typically requiring rent to be 125–145% of the interest-only mortgage payment at a stress-test rate of 5.5–6.5%.
Should I fix my buy-to-let mortgage rate?
Fixed rates provide certainty — you know exactly what your monthly payment will be for 2, 3, or 5 years. This makes cash-flow planning reliable and protects you if rates rise. The downside is that you pay an early repayment charge (ERC) if you want to exit the deal early, and you will not benefit if rates fall. In the current 2026 market, with the Bank of England base rate at 4.5% and BTL rates typically 5–6%, a 2- or 5-year fix is the most popular choice among landlords. Variable or tracker rates cost less initially but carry the risk of rising payments. Most landlords prefer the certainty of a fix, particularly on properties where the cash-flow margin is tight.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or mortgage advice. Mortgage rates, lender criteria, and tax rules change frequently — always verify current figures before making investment decisions. The calculations and examples above use representative rates and are intended for illustration; your actual mortgage offer may differ. Consult a qualified mortgage broker for advice specific to your circumstances. For further reading, see our <a href="/blog/buy-to-let-mortgage-calculator-uk">buy-to-let mortgage calculator guide</a>, <a href="/blog/best-buy-to-let-mortgage-lenders-uk-2026">best BTL mortgage lenders in 2026</a>, and <a href="/blog/buy-to-let-mortgage-requirements-2026">BTL mortgage requirements</a>.
