Mortgage Planning
What Is a Mortgage Stress Test Explained Guide
This overview defines a mortgage stress test in plain English, clarifies what it answers and does not, and shares quick examples so you know when to use it and why outputs are directional, not guaranteed.
Published: January 1, 2026 · Updated: January 1, 2026 · By FinToolSuite Editorial
Try the stress tester
Run a mortgage stress test, save scenarios, and compare outputs side by side.
Disclaimer
- Educational only. Not approval advice. No guarantees.
- Examples are illustrative.
- Results depend on inputs, assumptions, and randomness.
What is a mortgage stress test?
A mortgage stress test asks: how could payments and DTI behave if rates rise, income dips, or costs shift? It shows a model-based recommended safe loan, DTI distribution, and default probability so you can compare scenarios under consistent assumptions.
What it does not do
It does not grant lender approval, set an exact payment, or predict the future. It does not capture every local rule. Treat outputs as directional, not prescriptive.
Two quick illustrative examples
Example A
$400,000 price, 20% down, 30-year term, steady income. The stress test might show a recommended safe loan slightly under the loan amount with DTI tails rising if rates jump.
Example B
$550,000 price, 15% down, higher debts. The stress test may surface a tighter safe loan and a higher default probability when rates and costs rise together.
When to use it
- Shopping for a home and comparing prices.
- Considering refinancing and wanting to see stress outcomes.
- Comparing two scenarios with the same assumptions to see directional changes.
FAQs
Does the stress test predict my payment?
No. It provides directional results across simulated paths.
Can I compare two properties?
Yes. Save two scenarios with the same assumptions and compare outputs; see scenario comparison.
How do I read DTI percentiles?
Mid percentiles show typical paths; high percentiles show tougher tails. Learn more in DTI distribution explained.
What about limitations?
See limitations of simulations for scope and exclusions.
Where is the Privacy Policy?
Review Privacy Policy before sharing exports.
Run a stress test
Open the mortgage affordability stress tester and run two scenarios with one change to see the difference.