Mortgage Stress Test Calculator

300,000 mortgage at 4.5% over 25 years costs 1,668/month. Stressed at 7.5% it's 2,217/month — 549 higher. Lenders typically require the stressed payment to be no more than 40% of gross income, so a 2,217 stressed payment needs a gross income of roughly 66,500+ to qualify.

How to use it

Enter loan amount, current rate, stressed rate (lenders often use current + 2-3%), and term. The tool returns both monthly payments plus the income typically needed to pass affordability.

Why stress-test?

Rates can rise 2-4 percentage points in a cycle. If your current payment is 35% of gross income at 4%, a rise to 7% would push it to 45%+ — over most lenders' limits. Testing before borrowing prevents a future affordability crisis.

Quick example

With loan amount of 300,000 and current rate of 4.5% (plus stressed rate of 7.5% and term of 25 years), the result is 2,216.97. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Loan Amount, Current Rate, Stressed Rate, and Term (Years). Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

What's happening under the hood

Standard mortgage amortisation applied at both rates. Implied income requirement uses 40% payment-to-gross-income ratio as a typical lender cap — varies by lender and product. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

What the headline rate hides

Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals — then add the other costs separately before signing anything.

What this doesn't capture

The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.