When you take out a home loan, the bank stress-tests you at 3 percentage points above the actual rate (the APRA serviceability buffer). But that test only happens once. Once you're in the loan, your situation can change — interest rates can rise, your income can drop, or both. This calculator runs your current loan against several stress scenarios so you can see where the cliff edges are.

The 30% mortgage stress threshold

A widely-used rule of thumb (Roy Morgan, Digital Finance Analytics): if you're spending more than 30% of pre-tax household income on mortgage repayments, you're in "mortgage stress". Above 45% is "severe stress". Both indicate elevated default risk if anything goes wrong. The threshold is a guideline — a $300k household earner can sustain 35% comfortably; a $80k household can't.

Debt-to-income ratio

DTI = total household debt ÷ gross household income. APRA flags loans with DTI ≥ 6× as "high DTI" for reporting. Most banks won't write new loans above 7×. Above 8× is considered high-risk territory. DTI is a different lens than monthly affordability — it captures lifetime debt burden.

Why combined stress matters

Banks stress-test rates and income separately. But the worst recessions feature both at once — rates rising as the RBA fights inflation, then falling as job losses spread. Test the combined scenario before assuming you'd survive each in isolation. The 2008-2010 cycle ran exactly this pattern in many markets.

What this calculator doesn't model

Other debts (HECS, car loans, credit cards) — add them via the "other monthly debt repayments" input. Tax-deductible interest on investment loans (negative gearing offsets some of the stress for investors). Shared-equity arrangements. Variable vs fixed mix. For a personalised review, a mortgage broker can stress-test with full borrower data — most will do this for free as part of refinance discussions. See MoneySmart — Home loans.