What happens to your repayments if rates rise? Below is your loan stress-tested against +0.5%, +1%, +2%, the APRA-mandated +3% buffer, and a "historical norm" +4% scenario. The figures are computed against the loan parameters in your URL — edit them via the form below or the address bar.
Loan: $700,000. Current rate: 6.35%. Term: 30 years. Base monthly repayment: $4,356.
| Scenario | Stressed rate | Monthly repayment | Extra per month | Extra per year |
|---|---|---|---|---|
| Current | 6.35% | $4,356 | — | — |
| +0.5 pp | 6.85% | $4,587 | $231 | $2,774 |
| +1.0 pp | 7.35% | $4,823 | $467 | $5,606 |
| +2.0 pp | 8.35% | $5,308 | $953 | $11,430 |
| +3.0 ppAPRA | 9.35% | $5,810 | $1,454 | $17,446 |
| +4.0 pp | 10.35% | $6,325 | $1,969 | $23,630 |
Australia's banking regulator requires lenders to assess every loan at 3 percentage points above the offered rate. For your scenario, that means $5,810 per month at 9.35% — an extra $17,446 per year compared to your current rate. To "comfortably" service that repayment using the 30%-of-gross-income rule of thumb, you'd need household gross income around $232,381.
Rate rises aren't the only stress vector. A 10% income drop is roughly equivalent to a 0.7-1.0 percentage point rate rise. A 20% drop is roughly equivalent to +1.5 to +2.0 percentage points. The point of stress-testing isn't to find a single breaking number — it's to map your buffer in both directions.
Your loan should be survivable across at least the +3% APRA scenario at your current income, and the current rate at 80% of your current income, simultaneously if at all possible. Households outside both buffers are the ones AIHW research identifies as most likely to fall into mortgage stress during cycles.
The standard amortisation formula: M = P × r(1+r)n / ((1+r)n − 1), where P is the principal, r is the monthly rate (annual / 12), and n is the total number of monthly payments. Each scenario re-solves M against a different r. The same formula sits behind every Australian home loan calculator including ASIC Moneysmart.