What interest rate should I stress test at?

Test at your current rate + 2% at minimum. Banks use +3% for their assessments. The 2022-2023 rate cycle saw rates rise by 4% in 18 months - so higher stress tests aren't unrealistic.

How much emergency fund should I have?

Aim for 3-6 months of total expenses (including mortgage). If your job is unstable or you're a single income household, lean towards 6+ months. This buffer protects against job loss, unexpected repairs, or illness.

Affordability Stress Tester

AI Advisor

Test your loan against rate rises, income drops, and life changes

Free to useNo data storedAI insightsUpdated: February 2026

What happens if rates rise 2%? What if you lose your job for 3 months? What about having a baby? Our stress tester simulates these scenarios so you know your limits BEFORE you commit.

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Real-World Examples

Rate Rise Scenario

The Chens have $7,500 monthly income, $520,000 loan at 6.2%. They want to know if they can handle rates at 8%.

Inputs Used:

loanAmount:520,000interestRate:6.2loanTerm:28householdIncome:7,500monthlyExpenses:3,200emergencyFund:25,000

Current repayment: $3,050. At 8%: $3,680 (+$630). After expenses, buffer reduces from $1,250 to $620/month. Tight but manageable with emergency fund.

Income Drop Scenario

Maria earns $9,000/month but wants to know if she could handle dropping to $6,500 during parental leave.

Inputs Used:

loanAmount:480,000interestRate:6.5loanTerm:30householdIncome:9,000monthlyExpenses:2,800emergencyFund:40,000

At $9,000 income: $3,170 buffer. At $6,500: -$330 shortfall. Would need to draw $330/month from savings. 40k fund covers 10 months of shortfall.

Frequently Asked Questions

Glossary

Mortgage Stress

When housing costs exceed 30% of household income. At 40%+, you're in 'severe mortgage stress' with limited capacity to handle shocks.

Buffer Rate

The additional interest rate (usually 3%) that lenders add when assessing your ability to repay, ensuring you can handle rate rises.

DTI (Debt-to-Income) Ratio

Your total debts divided by annual income. Lenders typically cap this at 6-7x, but lower is more comfortable for you.

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How to Use

1Enter your loan and income details
2See stress test scenarios automatically
3Understand your buffer and limits
4Get recommendations to build resilience

Pro Tips

Banks stress test at your rate + 3% - so should you before buying
Aim for mortgage repayments under 30% of after-tax income for comfortable living
Build 3-6 months of expenses as an emergency buffer before stretching to max borrowing
If you're planning a baby, run the stress test with one income to see your capacity

Avoid These Mistakes

Borrowing the maximum approved amount without testing real-life scenarios
Not factoring in future changes like parental leave or career changes
Forgetting that utilities, insurance, and maintenance add to home ownership costs
Assuming rates will stay low or only rise gradually - they can jump quickly

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026