Interest-rate stress test
Current rate plus 1, 2, and 3 points to the payment and household surplus.
Enter your rate and household budget to see the payment at the current rate and at +1, +2, and +3 points, and whether a surplus remains at each — the core test for whether a variable loan is safe.
Key points
- Shows the payment at the current rate and at +1, +2, and +3 points.
- Shows whether a household surplus remains at each stressed rate.
- The core test for variable-rate affordability.
- If a stressed rate wipes out the surplus, the loan is too large.
Inputs and outputs
Inputs: current rate, loan amount and term, and household income and expenses.
Outputs: the monthly payment and remaining household surplus at the current rate and at +1, +2, and +3 points.
How to interpret the result
If the +2 to +3 point payment eliminates your surplus or forces a sale, the loan is too large for a variable structure — reduce it or choose fixed.
What the tool shows — and what it doesn’t
In short: Shows the payment at the current rate and at +1, +2, and +3 points; Shows whether a household surplus remains at each stressed rate; The core test for variable-rate affordability; If a stressed rate wipes out the surplus, the loan is too large.
A calculator is only as good as its inputs and the scenarios you test, and it models arithmetic, not approval: it cannot tell you whether a lender will lend, what rate underwriting will actually offer, or how your circumstances will change. Use it to compare options and to stress-test — run a mortgage at the offered rate plus one, two, and three points, and a purchase at pessimistic as well as central assumptions — rather than to produce a single answer. Advertised rates are execution-month or example figures, not guaranteed offers, so treat any result as a planning estimate and confirm the real numbers with a dated written quotation before you commit.
Who this is for
- Buyers and borrowers modeling a decision
- Anyone stress-testing affordability
What this is not
- A guaranteed quote or approval
- If the +2 to +3 point payment eliminates your surplus or forces a sale, the loan is too large for a variable structure — reduce it or choose fixed.
Frequently asked questions
Are variable rates risky?
Yes, especially when affordability depends on the starting rate. Choose variable only if you survive a 2–3 point rise without selling.
What happens if rates rise?
Interest cost rises; the timing of the payment change depends on the contract’s reset and payment rules.