UNDERWRITING GLOSSARY
Sensitivity
Sensitivity Analysis
Testing how results change when key assumptions change.
What does Sensitivity mean?
Testing how results change when key assumptions change. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Sensitivity in context
An underwriter tests DSCR at lower occupancy and higher interest rates.
Why it matters in financing
Sensitivity can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related underwriting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.