What are qualifying rates?

Sometimes referred to as "stress rates” or "plug rates”- qualifying rates are the interest rates used by lenders to determine the ability of a borrower to repay a loan.

These rates are higher than the actual interest rate charged and they are designed to ensure that the borrower won’t get into difficulty, should the rates rise.


The Qualifying Rate is the applicable interest rate plus a margin.

This margin is now determined by APRA and as of August 2019, is set at 2.5 % higher than the standard rate.

So for instance, if the advertised rate on a loan is 4%, the lender will calculate the serviceability at 6.5%.

Qualifying rates are mandatory and some lenders have a higher rate than 2.5%.


Need a property or vehicle loan?

Contact us @ propertyloans@realrenta.com


Marlene Liontis
Tuesday, 25 February 2020

Join our mailing list Receive Free Property Tips and news

Now Partnered With


Contact Us

1300 11 RENT (7368)