Mortgage Affordability Stress Tester
Model mortgage risk with shocks and safeguards
Choose a region, enter income, debts, and property details. We run Monte Carlo simulations to show default probability, debt-to-income distribution, and a recommended safe loan level.
Borrower & property
Region presets adjust taxes, PMI/LMI, and rates.
Advanced costs
Summary
Estimates are illustrative and for educational purposes only. This Mortgage Affordability Stress Tester does not provide financial, investment, tax, or legal advice. Results depend on your inputs and assumptions and may not reflect real-world mortgage costs, lender criteria, or future interest rates.
Plain-language summary
Run the simulation to see a plain-language summary.
Charts
DTI distribution
Scenarios
Save runs and compare them side by side.
Side-by-side comparison
| Scenario | Currency | Safe loan | Default prob | DTI mid | DTI high |
|---|
Scenario comparison
Add two or more scenarios, then run Compare scenarios.
Results explainer
You’ll see a default probability, debt-to-income distribution, and a suggested safe loan amount with monthly payments. The summary tells you whether rate shocks, income changes, or recurring costs drive most of the stress.
Disclaimer
Estimates are illustrative and for educational purposes only. This Mortgage Affordability Stress Tester does not provide financial, investment, tax, or legal advice. Results depend on your inputs and assumptions and may not reflect real-world mortgage costs, lender criteria, or future interest rates.
How it works
The model runs stress paths with rate shocks, income changes, and regional costs (taxes, maintenance, PMI/LMI) to see when monthly cash flow could go negative or DTI breaches a threshold. It reports the share of failing paths as default probability and computes a safe loan level under the stress settings you choose.
Inputs used
- Region preset (taxes, PMI/LMI, rate stress)
- Property price, down payment, term
- Income (and joint, if any) and existing debts
- Monthly costs like HOA, insurance, maintenance
- Stress settings and saved scenarios
Core formulas
- Mortgage payment ≈ L × r / (1 − (1 + r)-n)
- DTI = (debts + housing costs) ÷ income
- Default probability = failing stress paths ÷ total paths
- Safe loan derived from cash flow under stress settings
Calculation steps
- Calculate loan amount (price minus down payment) and monthly payment.
- Layer in regional costs: taxes, insurance, HOA, PMI/LMI, maintenance.
- Apply income and rate shocks across stress paths.
- Track monthly cash flow and DTI; flag paths that fail.
- Report default probability and DTI distribution.
- Suggest a safe loan level under the stress settings you chose.
Example scenario
Example: $550k property, $120k income, 20% down, 30-year term, US preset, moderate stress. The model computes the loan, monthly payment, and DTI. Under rate and income shocks, default probability might sit in a low-to-mid range, and the safe loan could drop below the headline loan if DTI or cash flow tighten under stress. Saving a second scenario with a higher down payment shows how default probability and the safe loan respond.
Interpretation notes
- Higher stress settings, taxes, or HOA push default probability up.
- Larger down payments and lower debts usually reduce risk and DTI.
- Rate-sensitive loans show bigger swings when stress settings rise.
- Saved scenarios reveal which levers (down payment, term, stress) move risk most.
- Results are illustrative; lender rules and offers can differ.
Limitations & assumptions
The model uses simplified regional costs and stress settings; it does not model every lender fee, future PMI/LMI removal, taxes at city level, or changes to your income or expenses beyond the shocks you set. Results are not predictions or advice. Always confirm details with lenders and your own budget.
FAQs
Quick answers
What does this stress tester estimate?
It estimates default probability, DTI distribution, and a suggested safe loan by running stress paths with rate shocks, income changes, and regional costs like taxes and PMI/LMI.
What is included or excluded?
Included: property price, down payment, term, income, debts, regional costs, and stress settings you enter. Excluded: lender-specific fees, city-level taxes, or future PMI/LMI removal unless you adjust inputs.
What assumptions are used?
It uses preset regional costs and stress add-ons, applies shocks across many paths, and flags failures when cash flow or DTI breach thresholds. Results are illustrative, not predictions.
Can I save or export scenarios?
Yes. Save multiple scenarios locally, compare them, and export summaries.
Is my data private?
Calculations run in your browser. Inputs stay on your device unless you export a file.
Is this financial advice?
No. It is an educational model. Confirm details with lenders and professionals before making decisions.
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