The household stress test

This article presents the methodology of the new stress test for households with a mortgage loan which the CNB uses to analyse the sector's resilience. Thanks to granular data on new mortgage loans and a forward-looking approach to simulating the overall mortgage portfolio, the test has a broad application for assessing the impacts of macroeconomic scenarios and calibrating macroprudential instruments. The article describes the main starting points and assumptions of the test. It also presents an application of the stress test using a three-year adverse scenario, for which the share of loans potentially at risk of default and, in turn, the share of non-performing loans are estimated.