Coverage first
Debt service coverage is often clearer than headline cashflow. It tells you how much income buffer exists before the loan starts dictating operational decisions.
Financing discipline
Stress debt service before you trust projected cashflow.
The mortgage tool pairs loan assumptions with property income so you can test coverage, monthly carry, and break-even occupancy. It is useful when a lender term sheet looks clean but the downside is still vague.
Sample debt profile
Two-year fixed snapshot
Monthly payment£1,316
DSCR1.41x
Stress payment£1,567
Break-even occupancy74.2%
If the break-even occupancy climbs too close to normal trading levels, your downside protection is thin even when the initial payment looks acceptable.
Tool 2
Mortgage stress and monthly cashflow calculator
This model uses a standard repayment formula. It then layers in monthly rent, non-debt costs, and a higher stressed rate to show whether coverage remains acceptable when financing costs move against you.
Monthly mortgage payment£0
Monthly net cashflow£0
Annual debt service£0
Debt service coverage ratio0x
Stress monthly payment£0
Cashflow at stress rate£0
Break-even occupancy0%
Stress the rate, not your confidence
A flat market does not remove refinancing risk. Testing a higher coupon before purchase is cheaper than discovering a weak margin later.
Occupancy is your margin of safety
Break-even occupancy translates a financing structure into an operating threshold. If that threshold is too high, management quality must carry more risk than it should.