How to Calculate Buy to Let Mortgage Repayments
To calculate buy to let mortgage repayments, use the standard amortisation formula. It takes the loan amount, the monthly interest rate and the number of months, and produces a fixed monthly payment that pays off both capital and interest by the end of the term, assuming the rate never changes.
Worked example: a £180,000 loan at 5.5% over 25 years. The monthly rate is 0.4583%, the term is 300 months, and the payment comes out at about £1,105 a month. Over the full term you pay about £331,600 in total, of which about £151,600 is interest and £180,000 is the original loan.
In practice the rate rarely stays fixed for 25 years, so treat the total as an illustration. The monthly figure is most useful for comparing deals and for checking whether the rent covers the payment with room to spare after tax, fees and empty periods.
- Repayment payment comes from the amortisation formula.
- £180,000 at 5.5% over 25 years is about £1,105 a month.
- Totals assume a fixed rate, so treat long-term figures as illustrations.
Try the free calculator to work out your own figures in seconds.