Rental yield calculator
Yield is the first test of a buy to let. Enter the price, the monthly rent and your running costs to see the gross yield and the net yield after costs, the numbers that tell you whether a property is worth stressing against a mortgage at all.
Rental yield measures what a property earns against its value, before finance and tax. Gross yield is the annual rent over the price. Net yield takes off the running costs first, so it reflects what the property actually returns. Enter the purchase price, the monthly rent and, optionally, the annual costs of running it, and the calculator shows both. Use it as the first filter on a deal, then check the rent supports the borrowing with the stress test. Everything runs in your browser.
Running costs typically cover management, insurance, maintenance, service charges, ground rent and a void allowance. Exclude the mortgage: yield is measured before finance.
- Net yield after costs0%
- Annual rent£0
- Annual running costs£0
- Net annual income£0
Indicative only. Yield is measured before mortgage interest and tax, and is not a measure of return on the cash you invest.
Reading gross and net yield
Gross yield is the quick comparison number: annual rent divided by the price. A property worth 200,000 pounds let at 1,000 pounds a month yields 6 percent gross. It is easy to compare across properties, but it ignores every cost of running the place. Net yield fixes that by taking off the annual running costs first, so it shows what the property earns before you service the mortgage. The gap between the two is your cost base, and it can be wide on a leasehold flat with a heavy service charge or an intensively managed house in multiple occupation.
Yield is the start, not the whole picture
Yield tells you whether a property earns enough overall. It does not tell you whether the rent will support the loan you need, because that is set by the lender's stress test, not by the yield. A high yielding property in the north might stress comfortably at 125 or 145 percent interest cover, while a low yielding flat in the south east can look fine on paper and still fail the stress test. So run the yield first to filter the deal, then take the rent to the buy to let mortgage calculator to size the borrowing, and fold in the stamp duty to see the true cost of getting in. For higher yielding strategies, see HMO mortgages and portfolio mortgages.
Rental yield calculator: common questions
What is a good rental yield?
As a rough guide, a gross yield of around 5 to 6 percent is a reasonable target for standard single let buy to let across much of the country, with higher yields common in the north and lower yields in the south east where prices run ahead of rents. Houses in multiple occupation and multi unit blocks aim higher, often into double figures gross, to compensate for the extra management and cost. What matters more than a headline number is whether the yield covers the mortgage at the lender's stress rate with a margin to spare, so always read the yield alongside the interest cover ratio.
How do you calculate rental yield?
Gross yield is the annual rent divided by the property value or purchase price, expressed as a percentage. So a property worth 200,000 pounds let at 1,000 pounds a month produces 12,000 pounds a year, a gross yield of 6 percent. Net yield deducts the annual running costs, such as management, insurance, maintenance, service charges and void allowance, before dividing by the value, so it reflects what the property actually returns before finance and tax. The calculator shows both from the price, the rent and your cost estimate.
What is the difference between gross and net yield?
Gross yield uses the full rent and ignores costs, so it is useful for a quick comparison between properties but flatters the return. Net yield subtracts the running costs, giving a truer picture of what the property earns before mortgage interest and tax. The gap between the two is your cost base: a property with a high service charge or heavy management can show a healthy gross yield and a thin net yield. Always look at net yield when you are deciding whether a deal works, and remember it is still before finance costs.
Does rental yield include the mortgage?
No. Both gross and net yield are measured against the property value and exclude mortgage costs, so they describe the property's return rather than your return on the cash you put in. To see how the borrowing sits against the rent, use the stress test: the rent has to cover the mortgage interest at the lender's notional rate with the required interest cover ratio. The yield tells you whether the property earns enough overall, the interest cover ratio tells you whether it earns enough to fund the loan. Run both before you commit.
Related calculators and finance
Buy to let mortgage calculator
Take the rent behind the yield and size the loan it supports against the stress test.
Open →Landlord stamp duty calculator
Fold the true cost of getting in into the net picture on a purchase.
Open →HMO mortgages
Higher yielding houses in multiple occupation and how lenders assess them.
Learn more →Found a deal that yields?
Send us the price and the rent. We check the rent supports the borrowing across the market and place the finance that fits.