An estimate, not advice. It uses 2026/27 tax rates and the SDLT residential bands including the 5% additional property surcharge. It assumes an interest-only mortgage and an individual owner — not a limited company.
What this does
Most yield calculators stop at gross yield, which is rent divided by price and tells you almost nothing. This one carries on: it takes off running costs to give net yield, then takes off mortgage interest and income tax — including the Section 24 effect — to show what actually reaches you, and divides that by the cash you had to find. That last number is the one that answers the question you are really asking.
The calculator
What each number means
| Measure | What it tells you |
|---|---|
| Gross yield | Rent divided by price. Useful only for comparing areas at a glance. |
| Net yield | After running costs and a realistic voids allowance, still divided by price. Compares properties without regard to how they are financed. |
| Return on cash | What actually reaches you, divided by what you actually put in. The only one that accounts for gearing and tax. |
Stress it before you trust it. Re-run the calculation with the mortgage rate two points higher and the voids allowance at 15%. If the return on cash is still positive, the deal is robust. If it is not, no amount of gross yield will rescue it.
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What is a good rental yield?
There is no national answer — high-yield areas typically show lower capital growth. A better test is whether the return on cash survives a two-point rate rise and a longer void.
Does this include stamp duty?
Yes. It calculates SDLT on the purchase price including the 5% additional property surcharge, and counts it as cash invested.
Why is my return on cash lower than the yield?
Because yield ignores mortgage interest and tax. Once Section 24 adds your interest back into taxable profit, a higher-rate taxpayer keeps considerably less than the yield suggests.
Does it work for a limited company?
No. Companies deduct interest in full and pay corporation tax — a different calculation entirely.
Should I use purchase price or current value?
Purchase price tells you whether the original decision was sound. Current value tells you whether holding still beats selling. Both are valid; be clear which you are asking.
What voids allowance should I use?
10% of rent covering voids and maintenance combined is a common working assumption, and a floor rather than a ceiling on older property.
Sources. GOV.UK stamp duty land tax residential rates and higher rates for additional dwellings; HMRC guidance on property income and finance cost relief; 2026/27 income tax rates. Checked 8 September 2026.
Related: Buy-to-let · All calculators · Landlord tax