Calculators
Interest rate increase: rent calculator
With interest rates rising, many landlords will be considering rent increases.
This calculator helps you find out how much you need to increase rent by to maintain the same profits, after tax.
Why do you need this calculator?
Contrary to what you may think, if your mortgage interest increases by £1,200 per year, simply passing on £1,200 as additional rent might leave you out of pocket.
Why? Because of section 24 tax.
If you're a higher or additional rate tax payer, the tax relief you get from the increase mortgage interest payment won't keep up with the extra tax due on the additional rent.
To maintain the same profit after tax, you may need to increase your rent further. In some cases, you may need to pass on double the interest rate increase.
If you want to maintain the same post-tax profits after a mortgage interest rise, this calculator is for you.