UK Buy-to-Let Yield & ROI Calculator (inc. Section 24 mortgage interest changes)
A UK-focused buy-to-let yield and ROI calculator. Estimates gross yield, net yield, cash-on-cash return and an indicative post-Section 24 cashflow impact using user-provided inputs. Includes author, last-updated date and limitations.
- Page updated:
- Jan 3, 2026
- Tool version:
- v1.1.0
Overview
This UK-focused buy-to-let calculator estimates common metrics used by investors: gross yield, net yield, cash-on-cash return and an indicative post-Section 24 cashflow adjustment.
The tool is illustrative and requires user inputs for rent, expenses, mortgage interest and tax rates. It does not replace professional advice.
Results
Estimated property value after period (GBP)
$220,816.16
Gross yield (%)
6
Net yield (%)
4.8
Cash-on-cash ROI (%)
16.5
Post-Section 24 annual cashflow (GBP)
—
How to read the result
- What it means
- The displayed value is an estimate based on your inputs. It represents the calculated scenario under current assumptions, not a guaranteed amount.
- Next step
- Use the result as a starting point. Adjust parameters to compare scenarios and validate with a professional when needed.
- Calculation limits
- The model uses simplified formulas and cannot account for all variables in your specific case (local regulations, personal conditions, temporal changes).
Methodology
Gross yield = (annual rent / purchase price) * 100.
Net yield uses operating expenses but excludes financing costs: (annual rent - operating expenses) / purchase price * 100.
Cash-on-cash ROI = annual pre-tax cash return divided by cash invested (deposit + upfront fees).
Section 24 adjustment is modelled as a simplified tax credit equal to the basic rate applied to mortgage interest paid. This is an illustrative simplification and not a tax calculation for filing purposes.
Glossary+−
- Gross yield
Annual rent divided by purchase price, expressed as a percentage. It does not account for expenses or financing.
- Net yield
Annual rent minus operating expenses, divided by purchase price, expressed as a percentage.
- Cash-on-cash ROI
Annual pre-tax cash return relative to the cash invested (deposit plus upfront costs).
- Section 24
UK tax change restricting mortgage interest relief for individual buy-to-let landlords, replacing full deduction of finance costs with a basic-rate tax credit for qualifying interest.
Key takeaways
Use this calculator to compare scenarios and understand order-of-magnitude returns for UK buy-to-let investments. It provides commonly used metrics but uses simplified tax assumptions.
For tax planning or compliance, consult an accountant or HMRC guidance specific to your circumstances.
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Worked examples
Example (UK)
Purchase price £200,000; expected rent £12,000/year; expenses £2,400/year; mortgage interest £3,000/year; deposit £40,000.
Interpretation
Gross yield = 6.0%. Net yield = 4.8%. Cash-on-cash ROI (pre-tax) = ((12,000 - 2,400 - 3,000) / 40,000) = 4.65% p.a. Section 24 adjusted cashflow reduces taxable relief on interest and provides a basic-rate tax credit; results are indicative.
Frequently asked questions
How does Section 24 affect the calculation?
Section 24 (the restriction on mortgage interest relief) means finance costs are no longer fully deductible against rental income for higher-rate taxpayers. Instead, a tax credit equivalent to the basic rate is applied to qualifying finance costs. This calculator models that effect as a simplified basic-rate tax credit applied to interest paid; consult HMRC or an accountant for precise treatment.
Are these figures legally binding?
No. Figures are indicative. They depend on the accuracy of inputs and simplified tax assumptions. Seek professional advice for exact results and tax filing.
Where can I verify the tax rules used?
See HMRC guidance on rental income and allowable expenses, and published summaries of Section 24 changes (links below).
Sources & references
- HM Revenue & Customs (HMRC) - Property income manual and guidance: https://www.gov.uk/government/organisations/hm-revenue-customs
- GOV.UK - Tax on property or land that you rent out: https://www.gov.uk/renting-out-a-property/paying-tax
- Royal Institution of Chartered Surveyors (RICS) - Residential property guidance: https://www.rics.org/uk/
Quality & oversight
- Author
- Ugo Candido, MBA
- Maintained by
- Ugo Candido, MBA
- Page updated
- Jan 3, 2026
- Tool version
- v1.1.0