Stress Test

A mortgage stress test is a calculation lenders perform to check whether you could still afford your monthly payments if interest rates were significantly higher than the rate you are applying for. Even if you can comfortably afford the payments at today's rate, the stress test may limit how much a lender is willing to offer you.

When you apply for a mortgage, the lender does not just check affordability at the product rate. They calculate what your payments would be at their standard variable rate (SVR) plus a buffer, or at a minimum stress rate — whichever is higher. This stress rate typically falls between 6% and 8%, depending on the lender.

Why stress testing exists

Stress testing was introduced as a responsible lending measure. Your mortgage might last 25 or 30 years, but a fixed rate deal typically lasts only 2 to 5 years. When your fixed period ends, you move onto the lender's SVR or need to remortgage at whatever rates are available. The stress test is designed to make sure a rate increase would not leave you unable to make your payments.

How 5-year fixes can help

Many lenders apply a reduced stress test, or no additional stress test at all, for fixed rate deals of 5 years or longer. The logic is that over a longer fixed period, you are protected from rate rises for a meaningful portion of your mortgage term, and you are also paying down more of the balance before the rate can change.

This means choosing a 5-year fix over a 2-year fix can sometimes increase the amount you are able to borrow. It is one of the reasons why understanding how affordability is calculated matters so much — the product you choose directly affects the maximum you can borrow, not just the monthly cost.

Last updated: April 2026