Hundred Summers

Buy-to-let calculator: yield, profit after tax, and the return on the money tied up

Gross and net yield, the cash left after interest, then the tax as HMRC actually charges it (interest not deductible, a 20% credit instead, the 2027 surcharge, additional-property stamp duty on the way in) for the return on equity a landlord really earns. Your figures never leave your browser.

Loading the calculator… (requires JavaScript; your figures never leave your browser)

Worked example

Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.

Inputs
Price / deposit£250,000 / £62,500
Mortgage rate (interest-only)5.5%
Rent£1,250 a month, 2 empty weeks
Agent / other costs10% / £2,000 a year
Landlord's other income£50,000
WhereEngland
Results
Gross yield / net yield6.0% / 4.4%
Additional-property stamp duty£15,000
Cash before tax (after interest)£668
Tax with the 20% interest credit (2027 rules)£2,495
Cash profit after tax£-1,827
Cash return on equity tied up-2.3%

The next question

What tax would I pay when I sell? →Property capital gains tax calculator

Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.

Read the guide

Why the headline yield misleads

Gross yield ignores everything that makes letting a business: empty weeks, agents, insurance, repairs, the mortgage, and above all the tax. Since April 2020 finance costs are not deductible. Tax is charged on rent less running costs at your marginal rate, then a 20% credit on the interest is allowed, capped at the tax on the property profit. For a basic-rate landlord that nets to the old position; for a higher-rate landlord it means 40% tax on money the lender received. From April 2027 property income pays a further two points. The calculator shows the full chain from rent to cash after tax, and states the return on the equity actually committed: deposit, additional-property stamp duty and fees.

What it does not count

Your own time, furnishing and licensing, energy-efficiency works, rent arrears, the cost of a bad tenant, and the capital gains tax on the way out, which the property CGT calculator prices. Capital growth is your assumption, shown separately from the cash return so the two can be judged apart. Owning through a company changes the tax entirely and is not modelled here. The rental income tax calculator gives the tax line alone; in the Hundred Summers app a rental property runs through every projected year with its income, costs, mortgage and eventual sale.

Education, not advice. HMRC rules for individual landlords; lenders’ stress tests and rental-cover requirements are separate and not modelled. For a personal recommendation speak to an FCA-regulated financial adviser; free impartial guidance is available from MoneyHelper.

Sources