What is the PSS requirement for borrowing Members seeking a mortgage payment higher than their current rental status?

The PSS (Payment Shock Sensitivity) requirement is in place to assess how well members can manage the transition from their current rental payment to a potentially higher mortgage payment. For individuals who are considering a mortgage payment that exceeds what they are currently paying in rent, the requirement is set at three months.

This timeframe allows evaluators to observe how members handle their financial obligations over a short yet significant period, providing a clearer picture of their capacity to cope with increased housing costs. The three-month requirement serves as a benchmark to ensure that a member has not only the financial resources but also the stability in their budget that would be necessary for taking on a larger mortgage. It strikes a balance between allowing members to demonstrate their financial readiness while also being sufficient to capture any fluctuations in their financial situation that could impact their ability to manage higher payments.

In contrast, other durations such as two months may not provide enough data for a reliable assessment, while longer durations like six or twelve months could be overly burdensome and dissuade potential borrowers who might be ready to graduate to homeownership. Thus, three months stands as the standard timeframe for this requirement.