I remember looking at the 10% stress test on the paperwork and thinking “oof”, but feeling a bit safer that people are at least being made aware of this when they take out a mortgage.
This was brought in last year to change the way stress testing on applicants runs. Previously, you had to be able to withstand 7% (iirc, don’t quote me), it’s now a 1% rise stress test, though the 4.5x salary limits still apply.
AHH interesting that makes more sense then because we remortgaged before those changes in the rules.
As an example, a borrower taking out a two-year fixed-rate mortgage at 2.2% with a revert to rate of 4% would need to show they could afford the monthly repayments on a rate of 7%.
I mean… they ain’t going to be coming off onto the 4% 🥲 but stress testing at 7% should still (for the time being) mean that everyone with a mortgage should have been aware of the risks and budgeted accordingly. No?
No-one wants to pay more of course… I have sympathy for that. I just don’t understand the shock that some people are claiming.
I remember looking at the 10% stress test on the paperwork and thinking “oof”, but feeling a bit safer that people are at least being made aware of this when they take out a mortgage.
This was brought in last year to change the way stress testing on applicants runs. Previously, you had to be able to withstand 7% (iirc, don’t quote me), it’s now a 1% rise stress test, though the 4.5x salary limits still apply.
AHH interesting that makes more sense then because we remortgaged before those changes in the rules.
I mean… they ain’t going to be coming off onto the 4% 🥲 but stress testing at 7% should still (for the time being) mean that everyone with a mortgage should have been aware of the risks and budgeted accordingly. No?
No-one wants to pay more of course… I have sympathy for that. I just don’t understand the shock that some people are claiming.