Ability-to-repay
Also called ATR
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Definition
Ability-to-repay is the federal mortgage standard that generally requires a lender to make a reasonable, good-faith determination that the consumer can repay the loan. It is not the same as a qualified mortgage.
In plain English
Before closing many mortgages, the lender has to look at whether the borrower can actually pay the loan back. That check is the ability-to-repay rule. A qualified mortgage is a related, narrower product category. This page names the repayment-determination duty. It does not list current underwriting tests.
Technical definition
CFPB’s mortgage key-terms page defines the ability-to-repay rule as the reasonable, good-faith determination most mortgage lenders must make. 12 CFR 1026.43 is technical context for the same duty, not a checklist of current numeric tests.
Why it matters
Product labels such as qualified mortgage or non-QM still sit under this broader repayment-determination idea.
Related terms
Related mortgage FAQ
Related mortgage FAQ: What is the ability-to-repay rule?
Sources reviewed
12 CFR 1026.43
Source reviewedSeptember 6, 2026
Mortgage key terms
Source reviewedSeptember 4, 2026
Important note
This page does not publish current ability-to-repay factors or numeric tests.
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