Mortgage Planning
Interest Rate Shock Mortgage Affordability
This guide shows how to model higher rates with scenarios, why even small increases matter, and how to read changes in DTI tails and the recommended safe loan without overthinking the numbers.
Published: January 1, 2026 · Updated: January 1, 2026 · By FinToolSuite Editorial
Open the stress tester
Create baseline and rate shock scenarios to see how outputs move.
Disclaimer
- Educational only. No guarantees. Rates and outcomes vary.
- Examples are illustrative.
- Results depend on inputs and assumptions.
Rate sensitivity basics
A 1% to 2% rate increase can raise payments and DTI, pushing stress tails higher. Modeling both helps see direction, not prediction.
How to model two scenarios
Save a baseline scenario, duplicate it, increase the rate by 1% or 2%, rerun, and compare safe loan, DTI mid/high percentiles, and default probability.
Example: +1% vs +2%
A +1% scenario may show a moderate payment and DTI increase; +2% can widen the DTI tail and lower the recommended safe loan further. Compare both to understand sensitivity.
Safety notes
- Avoid false precision; treat outputs as directional.
- Keep assumptions the same across scenarios to isolate the rate change.
- Rerun when rates move; note dates and labels.
FAQs
Can I test multiple shocks?
Yes. Create separate scenarios for each rate level and compare.
Do I change anything else?
Keep other inputs constant for a fair comparison.
How do I read the chart?
Look for a fatter tail in the higher-rate scenario. See how to read charts.
Where is privacy info?
See Privacy Policy before sharing exports.
Model a rate increase
Open the mortgage affordability stress tester, duplicate your baseline, add +1% or +2%, and compare outputs.