Interest cover ratio

The interest cover ratio is commonly abbreviated to ICR.

The interest cover ratio is a percentage of the rental income in relation to the interest payments at given rates. It measures how easily a landlord will be able to pay interest payments as they fall due.

Mortgage lenders use the ratio to assess the resilience of the landlord’s portfolio to increases in interest rate. It can be a key determining factor in securing a new mortgage or refinancing.

Photo of a percentage sign and Interest Cover Ratio
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