Most UK buy-to-let mortgages are interest-only because rental income is taxed before principal payments, and investors prefer maximising cashflow and tax efficiency.

What's a healthy cash-on-cash return?

5–8% is reasonable in many UK markets today. Below 0% means the deal is loss-making on cashflow and only works if capital appreciates significantly.

Does this include tax?

No — UK landlords now pay tax on rental income with limited mortgage-interest relief (Section 24). Subtract your effective tax rate from the headline figure.

Buy-to-Let ROI

Cash-on-cash return: how much your invested cash earns each year after mortgage interest and running costs.

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Currency

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Purchase price

Deposit (%)Mortgage rate (%)

Stamp dutyOther feesRefurb

Monthly rentMonthly running costsManagement, insurance, maintenance reserve, voids.

Cash-on-cash return

4.33%

On $80,500 of cash invested, your annual cashflow is $3,488.

Total cash invested

$80,500

Loan amount

$187,500

Monthly cashflow

$291

Mortgage interest / mo

$859

Cash-on-cash ignores capital growth and mortgage paydown. Total return is usually higher.

Results are estimates for informational purposes only. Not financial advice.

How to use this calculator

1Enter the purchase price and your deposit %.
2Add stamp duty, fees and any refurb costs to capture total cash in.
3Set the mortgage rate (interest-only is assumed for BTL).
4Enter expected rent and monthly running costs.

Results are estimates for informational purposes only.

Buy-to-Let ROI

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Buy-to-Let ROI

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FAQ

Why interest-only?

What's a healthy cash-on-cash return?

Does this include tax?

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