Stress rate
A stress rate is a higher assumed interest rate used by lenders to test affordability. It helps assess whether payments remain affordable if rates rise.
Last verified: 10/03/2026
Definition
A stress rate is an assumed interest rate used in affordability testing. It is often higher than the deal’s pay rate.
Why it exists
Stress testing is designed to check whether a borrower could still afford payments if interest rates rise or conditions worsen.
Practical tip
Even if you don’t know the lender’s exact stress rate, you can stress test your own budget by modelling monthly payments at +1% and +2%.
Related terms
- ICR
- Mortgage affordability