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Why is the lender testing me at a higher rate than I'll pay?

What you'll usually hear

Because the rules say they have to. A lender checks you could still pay if your rate went up later.

The bit that often gets missed

The stress rate is not a prediction. It's a buffer, and it's the single biggest reason people borrow less than they expected.

When you take a fixed rate, it ends. After that, the mortgage moves onto the lender's revert-to rate, sometimes called the standard variable rate. That rate is usually higher than the fixed deals being advertised.

So the rules ask lenders to look at where rates are likely to be over the first five years, and to assume they rise by at least one percentage point. Many lenders meet that by testing the payment at their revert-to rate plus a margin. In September 2026, the Bank of England's average revert-to rate was 6.58%. Add one point and you'd be tested at around 7.58%, even if the deal you're applying for is much lower. Lenders set their own margins, so the rate you're tested at varies.

There's one exception worth knowing. If your rate is fixed for five years or more, the rule doesn't require the same test, so some lenders assess a five-year fix at something closer to the rate you'll pay.

It isn't a forecast that rates will rise. It's a safety margin, built in so a change in rates or circumstances doesn't immediately put the payment out of reach.

It's also why the amount you're offered can feel lower than the headline rate suggests. The payment at the stress rate has to fit your budget, not the payment at the rate you'll actually pay.

Where this information comes from

General information, not advice about your circumstances. Rules and rates change; this page was last checked 28 October 2026. Spotted an error? Tell us.

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