Skip to content
Abodewise

Buy-to-let stress tests (UK): why rent can cap your borrowing

BTL lenders may test rent against a stressed interest rate and ICR requirement, so the rent can cap borrowing. Here’s the idea with an example.

Published: 26/03/2026 • Last verified: 26/03/2026

The short answer

Many buy‑to‑let lenders check affordability by asking: does the rent cover the mortgage interest at a higher “stress” rate?

They often apply an ICR (interest coverage ratio) on top (rent must exceed stressed interest by a margin). That’s why the property’s rent can cap borrowing, even if you have a large deposit.

A tiny example

Illustrative example:

  • Proposed loan: £200,000
  • Stress rate: 6% (illustrative)
  • ICR requirement: 130%

Stressed monthly interest:

  • (£200,000 × 0.06 / 12 = £1,000) per month

Required rent at 130%:

  • (£1,000 × 1.30 = £1,300) per month

If the market rent is £1,100/month, the rent may cap the loan size under that lender’s model.

Sources