What is the difference between interest-only and repayment buy-to-let mortgages?

Interest-only mortgages have lower monthly payments - you only pay the interest, not the capital. The loan balance stays the same throughout the term. Most buy-to-let investors choose interest-only to maximise monthly cashflow and plan to repay the capital via property sale or remortgage. Repayment mortgages reduce the balance each month but have higher monthly costs.

How much can I borrow on a buy-to-let mortgage?

Buy-to-let mortgage borrowing is based on rental income, not your salary. Most lenders require rent to cover 125-145% of the monthly interest payment at a stress rate of 5.5-6%. For example, if the monthly interest payment is £500, you need rent of at least £625-£725 per month to qualify.

Mortgage Repayment Calculator

Compare interest-only and repayment mortgages. Stress-test at higher rates.

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Annual Interest Rate (%)

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Mortgage Type

Repayment Interest Only

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LTV --

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Total Interest Paid --

Stress Test — Monthly Payment at Different Rates

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