Mortgage Stress Test Calculator

Stress testing reveals borrower/asset resilience to interest rate and revenue shocks.

Current NOI

Current debt service

Rate shock (bps)

NOI shock %

Loan balance

Current rate %

Stressed DSCR

0.92

Stressed NOI

$1,020,000

Stressed debt service

$1,111,538

How the math works

Stressed NOI = NOI × (1 + shock). Stressed DS = DS × (new rate / old rate). DSCR = NOI / DS.

$1.2M × 0.85 = $1.02M NOI. $850k × (8.5/6.5) = $1.11M DS. DSCR = 0.92x — fails 1.20x floor.

How to Use

Enter current noi.
Enter current debt service.
Enter rate shock (bps).
Enter noi shock %.
Enter loan balance.
Enter current rate %.
Read stressed dscr.

Frequently Asked Questions

Stress test scenarios?

Common stress: +200 bps rate (CMBS, agency standard test), +300 bps (extreme stress), -10% NOI (mild recession), -20% NOI (deep recession), +10% expense (inflation), 5–10% vacancy spike. Combined: rate + NOI shock simultaneously. DSCR floor: lenders require 1.20–1.40x DSCR after stress. Below 1.0x = insufficient cash flow to debt service. Borrower stress test (residential): qualifying rate (note rate + 2%) used by Canada, considered by U.S. regulators post-2008.

How does this debt analysis fit a workout strategy?

Workout, default, and recapitalization decisions depend on the gap between in-place debt and current asset value. Lenders evaluate cure cost, foreclosure timeline + cost, broker price opinion (BPO), and borrower equity. Borrowers evaluate equity in the property, refinance feasibility, and forbearance economics. This calculator provides one input to that multi-factor decision.

Discounted payoff (DPO) vs forbearance vs deed in lieu?

DPO: lender accepts less than full balance to avoid foreclosure cost, common with non-recourse and underwater assets. Forbearance: payment deferral 6–18 months, balance accrues, useful when value will recover. Deed in lieu: borrower transfers title to lender, faster than foreclosure but lender takes full risk. DPO often best when borrower has new capital + lender wants quick exit.

Special servicing dynamics?

CMBS loans transfer to special servicer at default or maturity default. Special servicer compensation aligns with workout, but timeline is 6–24 months and fees stack ($25–250k+ in costs). Whole-loan and balance-sheet lenders move faster but with less flexibility. Bridge and debt fund lenders most flexible. Time-to-resolution and total friction cost should be weighted in any borrower scenario.