Assessment Rate

An Assessment Rate is the interest rate used when the lender is assessing the serviceability of your loan. It is generally higher than the rate of the product you are applying for. For example, if the product’s interest rate is 5%, they may assess you on your ability to pay off the loan if the (assessment) rate is at 7%. It serves to provide some buffer that you can still repay the loan if interest rates go up. This is why you may argue you can afford the repayment when a lender is saying that you can't