Free tools/Interest Coverage Ratio Calculator
Interest Coverage Ratio Calculator
Check rental cover at your pay rate and a lender-style stress rate. See whether you pass your ICR target, and how much rent or loan size would be needed to clear it.
ICR at pay rate
171%
Passes
ICR at stress rate
140%
Passes
Monthly interest (pay rate)
£703
Monthly interest (stress)
£859
Rent needed to pass (monthly)
£1,074
Max loan to pass at stress
£209,455
Why ICR matters for BTL
Even if a deal cashflows today, lenders ask whether rent still covers interest when rates are stressed. Failing ICR is one of the most common reasons a remortgage or purchase falls short of the loan you wanted.
Background reading: interest coverage ratio for BTL and portfolio stress test guide.
Frequently asked questions
- What is interest coverage ratio (ICR)?
- ICR is annual rent divided by annual mortgage interest. Lenders often require rent to cover 125% or 145% of stressed interest, not just the pay rate.
- Pay rate vs stress rate?
- Pay rate is what you actually pay today. Stress rate is a higher rate the lender uses to test whether the rent still covers the loan if rates rise or the product reverts.
- Can I model a whole portfolio?
- This wave-1 tool is single-loan. For multi-property stress testing, see our portfolio stress-test guide - a full portfolio tool is planned next.
Related
Illustrative only - not mortgage, tax or financial advice. Figures depend on your lender, tax status and circumstances. Always check with a qualified adviser before acting.