How do you calculate the interest coverage ratio (ICR) / debt service coverage ratio (DSCR)?

The rent being generated from an investment property must equal the required ICR/DSCR percentage at the rate relevant to that product, as set out in the table below. For example, 125% at 5.00% means that the rental income must be 125% of the mortgage payments assuming an interest rate of 5.00%.

Interest coverage ratios and assessment rates
ApplicantSingle propertiesHMO and MUFB
Basic rate taxpayer (20%)125%130%
Limited company or LLP125%130%
Higher rate taxpayer (40%)140%145%
Additional rate taxpayer (45%)140%145%