Top Slicing Mortgage

What is top slicing?

Top slicing is a really interesting idea that some of the lenders have given us. With most Buy to Lets, the mortgage size is determined by what rent the property generates.

The rent usually needs to cover between 125% to 145% of the mortgage payments. With some lenders, however, if you have an income of £50,000 or more, you can actually use your income to borrow a bit more against the property [information correct at the time of recording in August 2025].

That’s really what top slicing is. Let’s say, for example, your property generates a mortgage of £300,000 but you need £325,000 – you can use your income to top up the remaining £25,000.

Who might benefit from top slicing?

It’s high earners with modest rental properties – often in and around London where you might see a high property price and the rent isn’t quite matching up. High income earners can top slice and cover any shortfall with their income.

First-time landlords who’ve chosen properties that don’t meet standard residential stress tests will definitely benefit from that, as well. Traditional portfolio landlords also definitely benefit from top slicing.

How do you calculate top slicing?

The lender will work out what the required rental coverage is. The standard is a 5.5% stress interest rate with 145% of rental coverage [correct at the time of recording in August 2025]. If that rental income falls short, the shortfall is then calculated based on your personal disposable income – your earned income from either employed or self-employed work.

For example, on a £200,000 loan that’s stressed at 5.5%, that gives you £916 a month. If the rental income is only £800 a month, that £116 shortfall could be covered with your income.

Which lenders allow top slicing? Do all lenders do this?

It varies. Not all lenders allow it. Currently some of the well-known lenders are Virgin Money, Clydesdale and Natwest. Metro is one of the specialist banks that does this, and you may also see some of the Lloyd’s Banking Group allow top slicing [correct at the time of recording in August 2025].