Debt Service Ratio Calculator (GDS/TDS)

Frequently asked questions

What is a good debt service ratio for a mortgage in Canada?

For a CMHC-insured mortgage, Canadian lenders generally cap Gross Debt Service (GDS) at 39% and Total Debt Service (TDS) at 44% of gross income. Some lenders may use more conservative internal limits than these caps, depending on the borrower, property, and loan type. Staying under the standard limits is what lenders check first when reviewing an application, though passing them doesn't guarantee approval.

What counts as housing costs in the GDS ratio?

GDS counts your monthly mortgage principal and interest payment, property tax, heat, and 50% of condo fees (if applicable) — divided by your gross monthly income. It does not include other debts like car loans or credit cards.

What is the difference between GDS and TDS?

GDS (Gross Debt Service) covers housing costs only. TDS (Total Debt Service) adds every other monthly debt payment — car loans, credit cards, student loans, lines of credit — on top of housing costs. Both are divided by gross monthly income and checked against separate limits (39% GDS, 44% TDS).

How does the mortgage stress test affect my GDS/TDS ratio?

The two work together, not separately. The OSFI stress test sets the interest rate lenders must use to qualify you — your contract rate plus 2%, or 5.25%, whichever is higher. Lenders then calculate GDS and TDS using that higher qualifying rate, not the rate you'd actually pay, which is why the mortgage payment used for qualifying is larger than your real monthly payment. See the Mortgage Stress Test Calculator to find your qualifying rate first, then use that payment figure here.

Does rental income count toward income for GDS/TDS?

Yes, but the treatment depends on the property. For a rental suite in the home you're buying (like a basement suite in a 2-unit property), lenders can count up to 100% of its gross rental income. For an investment property you already own, lenders typically use the net rental income (after expenses) rather than the gross amount. Policies vary by lender, so confirm the exact treatment with whoever is underwriting your file.

What if my GDS or TDS ratio is over the limit — can I still qualify?

Exceeding 39% GDS or 44% TDS would normally make the application ineligible under the standard CMHC-insured limits at that lender, but you have options: lower your housing costs (a smaller mortgage, a lower price range), pay down or consolidate other debts to reduce TDS, add a co-borrower's income, or look at lenders with different internal policies (uninsured, conventional lending sometimes allows more room). The Mortgage Qualifier Calculator shows the maximum mortgage that keeps both ratios within the standard limits, though approval always depends on the full application, not ratios alone.

Do lenders use gross or net (after-tax) income for GDS/TDS?

Gross income — your income before tax and other deductions. This is a common point of confusion, since your actual take-home pay is lower and can make the math feel off if you compare it against your net paycheque instead.

Is GDS/TDS checked again when I renew my mortgage?

Usually not if you renew with your current lender at the same amortization and amount — most lenders don't re-qualify existing borrowers at renewal. If you switch lenders, increase your mortgage amount (a refinance), or extend your amortization, the new lender will typically re-check GDS and TDS as if it were a new application, using current stress-test rates.