How Much Does a Buy to Let Mortgage Cost Per Month
How much a buy to let mortgage costs per month depends on the loan size, the rate, the term and whether you pay capital as well as interest. As a guide, a £180,000 loan at 5.5% over 25 years costs about £1,105 a month on repayment and about £825 a month on interest only.
Those figures are only the mortgage. A landlord's real monthly costs also include insurance, maintenance, letting and management fees, ground rent and service charges where they apply, and tax on the rental income. Empty periods, when no rent comes in but the mortgage still has to be paid, are the cost that catches new landlords most often.
To budget properly, add a contingency of at least one month's rent per year for voids and repairs, and check the after-tax position. If the rent does not cover the mortgage plus costs with room to spare, the property is subsidising the tenant, not paying you.
- £180,000 at 5.5% over 25 years: about £1,105 repayment, £825 interest only.
- Add insurance, fees, maintenance, tax and void periods.
- Keep at least one month's rent a year as contingency.
Try the free calculator to work out your own figures in seconds.