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Q: How does the stress test work for people with income in foreign currencies?

A: The stress test is applied to the mortgage repayment. For example, if an applicant earns income in dollars and applies for a mortgage costing £2,000pm, we will ascertain whether the applicant can afford 25% more, i.e £2,500 pm, reflecting an adverse movement in the exchange rate. The percentage applied varies by currency and we can confirm the detail of the test on application. The stress test varies by currency because of political or economic factors:

1. Category 1 (25% stress test): EUR, USD, CHF, SGD, AUD, NZD, CAD, HKD
2. Category 2 (30% stress test): AED, QAR, KWD, JPY
3. Category 3 (requires Credit Committee Approval): All other currencies

Q: What if the client’s income does not pass the stress test?

A: We may still be able to assist if there are other compelling strengths to the application,
for example if the customer holds substantial liquid assets.

Q: Can these cases still be considered following the Mortgage Credit Directive?

A: Yes, the policy and all documentation are fully compliant with MCD.