Lesson 4 of 6
Residual income, buffers and stress tests
A ratio says what share of income goes to debt; residual income says how much money is left to live on. Buffers and stress tests then ask whether that amount would survive a higher interest rate or a fall in income. Together they turn a snapshot into a judgement about the life of the loan.
Published 17 October 2026 · Listen to this lesson
In this lesson
- Residual income: what is left
- Buffers: room for the months that go wrong
- Interest rate stress tests
- Income stress tests
- A worked example