UK BTL Stress Test (PRA)

UK lenders typically require 145% rental coverage at a stress rate of 5.5% — for higher-rate-tax landlords.

Updated May 2026, using HMRC 2026/27 rates and current ONS / gov.uk figures.

The PRA stress test ensures rental income covers mortgage payments at a hypothetical higher rate. Formula: rent must >= 145% (basic rate) or 125% (limited company) of mortgage interest at 5.5% stress rate.

Worked examples

£200k loan at 5.5% stress = £11,000/yr interest. 145% ICR requires £15,950/yr rent (£1,330/mo).

£300k loan at 5.5% stress = £16,500/yr interest. 145% requires £23,925/yr (£1,994/mo).

Sources: PRA underwriting standards for BTL · retrieved 2026-05-12.

Frequently asked questions

Does this apply to all BTL?

Most regulated portfolio landlords (4+ properties) and higher-rate individual landlords. Limited companies face 125% ICR; HMOs may face higher.

Can I still get the loan if rent doesn't meet the stress test?

Some lenders offset with personal income or larger deposit. Specialist BTL lenders sometimes have lighter rules.