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Buy to let stress testing?

lightspeed · 2025-05-01 22:06:08

Hi I'm approved for a buy to let mortgage. For this I need 30% deposit which I have. The stress test for this is that they take current rate of 5.55% and add 2% so rate is then 7.55%. They see what this repayment amount would ge and multiply it by 1.5 times. So to borrow about 240k I get a stress tested amount of €2673. Im…

01-05-2025 11:06PM

#1

lightspeed

Registered Users, Registered Users 2 Posts: 1,298 ✭✭✭

Join Date: October 2009

Posts: 1010

Hi
I'm approved for a buy to let mortgage. For this I need 30% deposit which I have.
The stress test for this is that they take current rate of 5.55% and add 2% so rate is then 7.55%. They see what this repayment amount would ge and multiply it by 1.5 times. So to borrow about 240k I get a stress tested amount of €2673.
Im looking at a 3 bed in Balbriggan and I can only see one house to rent in Balbriggan and it is at €2700.
My question is I'd this enough to convince the bank I can achieve this rent or will the bank be relying on an estate agent to value the rental income achievable?

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Comments

#2 06-05-2025 04:31PM

3DataModem

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Join Date: March 2008

Posts: 3974

The rental of 2700 could net about 1500 after tax assuming full occupancy, so the bank will want to know you can make up the difference, and also that you can cope with zero occupancy periods (i.e. longer gaps in rental income during refurbishment or if overheld).

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