Question 1

What is the difference between cashflow and yield?

Accepted Answer

Yield measures your return as a percentage of the property value, independent of how you financed the purchase. Cashflow measures the actual cash left in your pocket each month after every cost, including your mortgage payment. A property can have a healthy yield but still be cashflow-negative once mortgage payments are factored in, which is why both figures matter and neither tells the whole story on its own.

Question 2

Should I choose an interest-only or repayment mortgage for buy-to-let?

Accepted Answer

Most buy-to-let mortgages in the UK are taken on an interest-only basis, which keeps monthly payments lower and preserves cashflow, with the loan itself repaid at the end of the term (typically by selling or refinancing). Repayment mortgages cost more each month but build equity and reduce the loan over time. This calculator lets you compare both so you can see the cashflow impact of each approach side by side.

Question 3

What counts as "total cash invested" in the cash-on-cash return figure?

Accepted Answer

It is the actual cash you put in to complete the purchase: your deposit, the stamp duty (SDLT) due on an additional property, and an estimate for legal fees, surveys and mortgage arrangement costs. Cash-on-cash return then shows your annual cashflow as a percentage of that figure, which is often a more meaningful measure of return than yield alone, since it reflects how hard your actual cash is working rather than the property's total value.

Question 4

What is "break-even rent" and why does it matter?

Accepted Answer

Break-even rent is the monthly rent at which your cashflow would be exactly zero, that is, the minimum rent needed to cover your mortgage payment and all running costs. It is a useful stress-test figure: if the market rent for similar properties is close to or below your break-even rent, the investment leaves very little room for error if rates rise, costs increase, or the property sits empty for longer than expected.

Question 5

Does this calculator account for tax on my rental profit?

Accepted Answer

No, this calculator focuses purely on cashflow: the cash moving in and out each month before tax. Your actual after-tax position will depend on your income tax band, allowable expenses and the Section 24 mortgage interest restriction. Use our Section 24 Tax Calculator or Rental Income Tax Calculator alongside this one to see the full picture, including how much of your cashflow you will actually keep after tax.

Buy-to-Let Cashflow Calculator

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Buy-to-Let Cashflow Calculator

Your results

Frequently asked questions

What is the difference between cashflow and yield?−

Should I choose an interest-only or repayment mortgage for buy-to-let?+

What counts as "total cash invested" in the cash-on-cash return figure?+

What is "break-even rent" and why does it matter?+

Does this calculator account for tax on my rental profit?+

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