• The mortgage stress test (affordability assessment) requires lenders to check that a borrower can still make the payment at a rate that is higher than the actual mortgage rate
  • You need to pass the stress test even if you don’t need mortgage loan insurance.
  • The bank must use the higher qualifying interest rate of either 5.25% or the bank’s interest rate plus 2%.
  • Credit unions and other lenders that are not federally regulated do not need to use this mortgage stress test.
  • This means that your income needs to be high enough and your existing debt low enough to be able to pay down your mortgage at the higher rate.