Calculator
Buy-to-Let Yield Calculator
Work out the gross and net rental yield, monthly cashflow, annual profit and cash-on-cash return on any rental property. Adjust the inputs to see results update instantly.
For landlords & investors: enter the purchase price, the rent, your deposit and the running costs. The calculator separates yield (how the property performs) from cash-on-cash ROI (how hard your invested money works) — the two numbers every buy-to-let decision really turns on.
Property & rent
£14,400 per year
25% of property price · 75% LTV
Running costs
% of rent
empty weeks, % of rent
One-off — used for cash-on-cash ROI
Where the monthly rent goes
How the buy-to-let yield calculator works
Buy-to-let returns come in two flavours, and confusing them is the most common mistake new landlords make. Yield measures how the property performs relative to its price. Cash-on-cash ROI measures how hard the actual money you invested is working. This calculator shows both, plus the monthly cashflow that determines whether a property pays for itself.
The formulas
- Gross yield = annual rent ÷ property price × 100
- Net yield = (annual rent − running costs) ÷ property price × 100
- Monthly cashflow = monthly rent − mortgage − monthly running costs
- Annual profit (pre-tax) = monthly cashflow × 12
- Cash-on-cash ROI = annual profit ÷ (deposit + purchase costs) × 100
Running costs here are letting/management fees (a % of rent), a void allowance for empty weeks (a % of rent), annual maintenance, and insurance & other costs. On an interest-only mortgage the monthly payment is simply loan × monthly rate; on repayment we use the standard amortisation formula.
Worked example
Scenario: £250,000 property, £1,200/month rent, £62,500 deposit (25%), 5.5% interest-only, 10% management, 5% voids, £600 maintenance, £250 insurance, £12,000 purchase costs.
Annual rent: £14,400 · Gross yield: 5.8%
Running costs: £1,440 + £720 + £600 + £250 = £3,010 · Net yield: 4.6%
Mortgage (interest-only): £187,500 × 5.5% ÷ 12 = £859/mo
Monthly cashflow: £1,200 − £859 − £251 = £90 · Annual profit: ~£1,080
Cash invested: £62,500 + £12,000 = £74,500 · Cash-on-cash ROI: ~1.4% (before any capital growth)
Frequently asked questions
What is the difference between gross and net rental yield?
Gross yield is annual rent divided by the property price — it ignores costs. Net yield subtracts annual running costs (management, maintenance, insurance and a void allowance) before dividing by the price, so it reflects the income you actually keep before mortgage and tax. Net yield is always lower than gross and is the more honest figure to judge a property on.
What is a good rental yield in the UK?
As a rough guide, a gross yield of 5-6% is typical, 7%+ is strong, and below 4% usually means you are relying on capital growth rather than income. Yields tend to be higher in the North of England and lower in London and the South East, where prices are high relative to rents. Always look at net yield and monthly cashflow, not just the headline gross number.
Does this calculator include tax?
No — the profit and ROI figures are pre-tax. Buy-to-let tax depends on how you hold the property. Individual landlords can no longer deduct mortgage interest as an expense (Section 24) and instead receive a 20% tax credit; limited-company landlords pay Corporation Tax on profit. Speak to an accountant or a specialist broker for your specific position.
What deposit do I need for a buy-to-let mortgage?
Most BTL lenders require at least a 25% deposit (75% loan-to-value), though some lend to 80% and the best rates often sit around 60% LTV. Lenders also apply a rental stress test, typically requiring the rent to cover 125-145% of the mortgage interest at a notional rate, so a higher deposit can be needed to make the numbers fit.
What is cash-on-cash ROI?
Cash-on-cash return is your annual pre-tax profit divided by the actual cash you put in — the deposit plus purchase costs such as stamp duty, legal fees and refurbishment. Because most buy-to-lets are mortgaged, a modest yield can still produce a healthy return on the cash you actually invested. It is often the most useful single number for comparing deals.
Should I use an interest-only or repayment mortgage?
Most buy-to-let investors choose interest-only because the lower monthly payment maximises cashflow, with the loan repaid later from sale or refinancing. Repayment builds equity over time but reduces monthly profit. Switch the mortgage type in this calculator to see the cashflow difference for your deal.