Answers · UK 2025/26
What is the UK mortgage stress test?
Lenders must stress-test affordability at a rate higher than what you'd actually pay — typically your initial rate +1%, or the Bank of England base rate +3%, whichever is higher. Since August 2022 the FPC affordability test was withdrawn but most lenders still stress-test.
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UK mortgage stress testing 2025/26. Lenders apply a "stress rate" to confirm you could still afford the mortgage if interest rates rose. Two FCA Mortgage Conduct of Business (MCOB) rules apply: (1) Interest rate stress — lenders must check affordability at the higher of: (a) your initial rate +1%, or (b) a stress rate they determine based on Bank of England forward guidance. (2) Income vs expenditure check — looks at council tax, utilities, credit cards, car finance, childcare, food etc. The FPC Affordability Test (which required stressing at SVR +3%) was withdrawn in August 2022 but most major lenders still apply their own stress at around 7-8% to manage risk. Practical impact: a couple earning £70k borrowing 4.5× = £315,000. At a stress rate of 8%, monthly payment on a 30-year mortgage is £2,310 — lenders check this against your net income (~£4,100/month combined) and outgoings. Tight outgoings or large debts reduce maximum loan. First-time buyers benefit from lower stress tests under the Mortgage Guarantee Scheme. Bank of Mum and Dad: gifts (not loans) reduce stress impact.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.