Buy-to-Let Yield Calculator — Gross, Net & Cash-on-Cash

How the maths works

The formula behind this calculator, with a worked example built from your own inputs.

Rental yield & cash-on-cash returnBuy-to-let

Gross yield = (monthly rent × 12) ⁄ price × 100

Net yield = ((rent − running costs) × 12) ⁄ price × 100

Cash flow = rent − mortgage − running costs

Cash-on-cash = (cash flow × 12) ⁄ (deposit + fees) × 100

Interest-only mortgage payment = loan × annual rate ⁄ 12 (you never repay principal, so the balance stays put).
Repayment uses the amortising formula at the top, over 25 years.
Gross yield judges the property; cash-on-cash judges your money — which is why a bigger mortgage can raise the second while leaving the first unchanged.

Worked example: £200,000 at 25% deposit → loan £150,000. Interest-only = £675/mo. Cash flow = £335/mo. Gross yield 6.9%, cash-on-cash 6.8%.

About the currency selectorCurrency

Changing the currency relabels the figures — it does not convert them. There are no exchange rates involved, and nothing is fetched from the internet.

If you enter 280,000 and switch from pounds to dollars, the tool reads it as 280,000 dollars, not as a converted amount. The maths is identical in every currency because percentages, ratios and time don't care about the unit — a 25-year loan at 4.8% has the same payment-to-principal relationship whether it's in yen or rand.

What does change is formatting, which follows each region's own conventions: where the symbol sits (€ goes after the number in German), which separators are used (Switzerland uses apostrophes, South Africa uses spaces), how digits are grouped (India groups in lakhs — 1,71,120 rather than 171,120), and whether decimals exist at all (yen and won have no minor unit).

So pick the currency you're actually working in and enter local amounts. Don't enter pounds and switch to dollars expecting a conversion.

Assumptions & what these formulas ignoreImportant

Interest compounds monthly on the outstanding balance — standard for UK repayment mortgages, though some lenders calculate daily, giving slightly different totals.

Rates are assumed fixed for the whole term. In reality a fixed period ends and you revert or remortgage, so long-term totals are illustrative.

Not included anywhere: arrangement and broker fees, stamp duty, early repayment charges, void periods, maintenance, letting agent fees, income or capital gains tax, and inflation. Figures are in today's money.

Overpayment caps: many fixed deals limit penalty-free overpayments to around 10% of the balance a year.

Investment returns assume future variability resembles the past — which markets regularly break. Depreciation curves are typical patterns, not valuations; real resale depends on mileage, condition, spec and demand.

These tools are for estimating and comparing options. They aren't financial advice, and for a decision that matters it's worth speaking to a qualified adviser or broker.

Frequently asked questions

Direct answers about this calculator.

What is a good rental yield?

Gross yield is a year's rent divided by the purchase price. It judges the property, but flatters a deal because it ignores the mortgage and running costs. Net yield subtracts running costs but not the mortgage, since financing is a separate decision from how the property itself performs. Cash-on-cash return divides annual profit by the cash you actually invested (deposit plus fees) and is the best measure of what your own money is earning.

What is the difference between interest-only and repayment mortgages?

An interest-only mortgage payment is the loan multiplied by the annual rate divided by 12. You pay only the interest, so the balance never falls and the full amount is still owed at the end of the term. A repayment mortgage uses the amortising formula and gradually clears the debt, so monthly payments are higher but you own the asset outright at the end.

What is the difference between gross yield and net yield?

Gross yield is a year's rent divided by the property price. Net yield subtracts running costs such as insurance, letting fees and maintenance, but deliberately excludes the mortgage. That is because the mortgage is a financing choice, not a cost of the property itself - two identical flats would otherwise show different net yields purely because of deposit size. To measure what your own money earns, including financing, use cash-on-cash return instead.

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About these calculators

How the numbers are produced, what they are not, and where to get regulated advice.

How the numbers are produced

Every figure comes from a published formula shown openly in the How the maths works section, alongside a worked example built from your own inputs. Nothing is estimated, weighted or adjusted behind the scenes.

The calculations run entirely in your browser. Nothing is stored, no accounts, no tracking, no adverts, and no affiliate links to mortgage or insurance products. Nobody pays to appear here, so there is no incentive to nudge a result in any direction. The one time anything leaves your device is if you click Update to latest figures on the inflation tab — that makes a single request to the World Bank's open data API for newer price indices, and sends nothing about you. Every other figure, including the bundled inflation history, is already in the page.

Default rates and depreciation curves are typical illustrative figures, not live market data. The tools do not fetch interest rates, house prices, exchange rates or resale values from anywhere.

Limitations — read before relying on this

These are estimating tools for comparing options, not a substitute for professional advice. In particular:

· Figures exclude fees, stamp duty, early repayment charges, tax, void periods, maintenance and inflation.
· Rates are assumed fixed for the whole term; in reality fixed periods end and you revert or remortgage.
· Investment simulations assume future variability resembles the past — which markets regularly break. They show modelled uncertainty, not a forecast.
· Depreciation curves are typical patterns, not valuations. Real resale depends on mileage, condition, spec and demand.
· Changing currency relabels figures; it does not convert them.

For a decision that matters, speak to a qualified mortgage broker, accountant or FCA-regulated financial adviser. Nothing here is financial advice.

Sources & further reading

For impartial, regulated guidance in the UK:
· MoneyHelper — the government-backed free money guidance service
· MoneySavingExpert — mortgage guides and comparison tools
· Bank of England — current Bank Rate
· GOV.UK — Stamp Duty Land Tax
· FCA — checking an adviser is regulated

The amortisation, yield and depreciation formulas used here are standard published finance formulas, not proprietary methods — you are encouraged to check them against any other source.