CAN YOU HANDLE A POTENTIAL INCREASE IN MORTGAGE RATES?
- johnathanmcquoid
- Jan 17
- 2 min read
Many buyers underestimate how even a small rise in mortgage rates can impact qualification.
Higher rates affect monthly payments, borrowing power, and the income needed to qualify.
Here’s what every buyer needs to understand 👇
1️⃣ Rates don’t need to rise much to make a big impact
Even a modest rate increase can significantly change what lenders will approve.
✔️ higher rates = higher payments
✔️ higher payments = higher income needed
✔️ higher income = lower approval odds
A small shift in rates can sharply reduce your purchasing power.
2️⃣ Monthly payments increase faster than most people expect
When rates rise, the same mortgage becomes more expensive to carry.
✔️ higher monthly payment
✔️ less room in your budget
✔️ more pressure on debt ratios
Payment increases often surprise buyers who think the jump will be small.
3️⃣ Higher rates reduce how much you qualify for
Mortgage approvals are based on strict formulas and stress-testing.
✔️ higher assumed payment
✔️ higher qualifying rate
✔️ lower mortgage approval amount
A buyer who qualifies today may not qualify if rates rise later.
4️⃣ Stress-test rules magnify the effect of rising rates
Borrowers must qualify at a higher rate than they actually receive.
✔️ lenders test worst-case scenarios
✔️ higher stress-test = tighter qualification
✔️ reduced buying power
As contract rates rise, the stress-test rises too — making approval harder.
5️⃣ Waiting to buy can cost you more than you think
Many buyers plan to “wait a bit longer,” not realizing the risk.
✔️ rates could rise
✔️ qualification could shrink
✔️ purchasing power could drop
Waiting can mean losing access to the home you want.
💬 Final Thought
A small increase in mortgage rates can create a big difference in your approval, your payment, and the home you qualify for.
If you want to see exactly how much rate movement you can handle safely, send The Frontline Mortgage Group a message anytime. 💬