Stress-Testing Your Mortgage: Can You Handle Higher Rates?
A simple way to test your budget against rate rises and falling income.
4 min read · Mortgage & Property
Interest rates can change quickly. A stress test shows whether you could cope with a worse scenario.
Raise the rate
Recalculate your payments at 3 %, 4 % and 5 %. Banks use about 5 % in their affordability test, so this shows how close your budget is to the bank's view.
- Total interest, fixed
- Total interest, SARON
Example with default values. Open the calculator →
Lower your income
Test a drop of 20 % in household income, for example through unemployment, illness or a parental break. Include the fixed costs that do not fall.
Prepare your options
- Fix part of the loan for several years.
- Keep an emergency fund of at least six months of housing costs.
- Know how flexible your amortization schedule is.
Run the numbers in the mortgage cost calculator.