Mortgage Stress Test Calculator
APRA requires lenders to assess your loan at your current rate plus a 3% buffer. Use this calculator to see whether your loan passes the stress test and what your repayments would look like if rates rise.
Serviceability Stress Test Calculator
Test whether your loan is serviceable at the APRA standard buffer rate (+3%).
Enter to see debt-to-income ratio assessment.
Current Rate
6.00%
$2,997.75/mo
Stressed Rate (+3%)
9.00%
$4,023.11/mo
| Monthly repayment at current rate | $2,997.75 |
| Monthly repayment at stressed rate (9.00%) | $4,023.11 |
| Increase in monthly repayment | +$1,025.36 |
| Stressed repayment as % of gross monthly income | 40.2% |
May not meet serviceability at the stressed rate
At the stressed rate of 9.00%, your repayments would represent 40.2% of your gross monthly income. Many lenders use a 30% to 35% threshold. You may need a larger deposit, shorter term, or lower loan amount.
This stress test uses the APRA standard +3% buffer. Lenders have their own serviceability calculators and may apply different criteria. This is an estimate only. Speak with a licensed mortgage broker for a formal assessment.
What Is the APRA Serviceability Buffer?
The Australian Prudential Regulation Authority (APRA) requires all authorised deposit-taking institutions (banks, credit unions, building societies) to assess home loan applications using a minimum interest rate buffer. Since October 2021, this buffer has been set at 3% above the loan's current interest rate.
This means if you are applying for a home loan at an advertised rate of 6.00% per annum, the lender must confirm you can afford repayments as if the rate were 9.00%. This is designed to protect borrowers from taking on more debt than they can afford if rates rise.
The buffer applies to new home loans, refinancing, and increases to existing loans. It is not something you can negotiate around, as it is a regulatory requirement imposed on lenders, not a lender policy.
Who Sets the Buffer?
APRA, the Australian Prudential Regulation Authority, sets the buffer as part of its macroprudential policy settings. It was raised from 2.5% to 3% in October 2021 as property prices and debt levels increased.
Who Does It Apply To?
The 3% buffer applies to loans from APRA-regulated lenders (banks, credit unions, building societies). Non-bank lenders regulated by ASIC are not required to apply the same buffer, though many choose to.
Can the Buffer Change?
Yes, APRA adjusts the buffer based on macroeconomic conditions. It has been 2.5% and 3% at different points. Lenders must follow current APRA guidance, not historical rates. Always check the APRA website for the current buffer requirement.
What to Do If You Do Not Pass the Stress Test
Increase Your Deposit
A larger deposit means a smaller loan. A lower loan amount reduces both your current repayments and your stressed repayments, making it easier to pass the serviceability test.
Extend Your Loan Term
A 30-year term has lower repayments than a 25-year term, which may help you pass the serviceability test. Note that a longer term means paying more total interest.
Reduce Existing Debts
Existing debts (credit cards, personal loans, car loans) reduce your assessed borrowing capacity. Paying them off before applying can significantly improve your serviceability.
Choose a Lower Rate Product
The stressed rate is calculated from the actual loan rate. Choosing a lender with a lower advertised rate reduces your stressed rate, which may help you meet the serviceability threshold.
Add a Co-Borrower
Adding a second borrower's income to the application increases total assessed income, which may be enough to pass the serviceability test for the loan you need.
Consider a Less Expensive Property
If none of the above options are sufficient, buying a property at a lower price point may be the most practical path to approval in the short term.
