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. A rate move of that size is well outside the day-to-day, but it's a useful benchmark for understanding how sensitive a long-term mortgage commitment is to the rate environment.

How to use it

Enter loan amount, current rate, stressed rate (a common test is current + 2-3 percentage points), and term. The tool returns the monthly payment at both rates, the monthly increase, and the annualised cost of that rise.

Why stress-test?

Rate environments shift over time, sometimes by several percentage points across a cycle. Running the calculator with a stressed rate well above the current quote shows the size of the payment shock that would land if rates moved to that level — useful information when deciding how much headroom to leave in a household budget at the original rate.

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, with the difference reported as the monthly payment increase. 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 this doesn't capture

The calculation reports the monthly payment increase only — it doesn't translate that into an income requirement, factor in any tax treatment of mortgage interest where applicable, or model when a rate change would actually take effect. For variable-rate loans, a rate change can be near-immediate; for fixed-rate loans, the test is most relevant near the end of the current fix when the rate is about to reset. Re-running the calculator with different stressed rates and term assumptions is the typical way to size the headroom needed at the original rate.