Debt-to-Income Calculator

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 a 'debt' in a debt-to-income calculation?

Housing costs (mortgage or rent, property tax, heat, and 50% of condo fees) plus every other required monthly debt payment — credit cards, lines of credit, car loans, personal loans, and student loans. It does not include everyday living expenses like groceries or utilities that aren't a fixed debt obligation.

How is my credit card or line of credit payment estimated if I don't know it?

If you leave the monthly payment blank for a credit card or line of credit, this calculator defaults to 3% of the balance per month — a common minimum-payment approximation. Car loans and personal loans are not defaulted this way, since an amortizing loan payment depends on the rate and term, which this calculator doesn't know unless you enter the actual payment.

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).

Do lenders outside of mortgages use the same 44% TDS limit?

There's no single published Canadian rule for every type of lender. 40% is a common ceiling most lenders — mortgage and otherwise — use as a rule of thumb for total debt service, but the specific 39% GDS / 44% TDS figures used throughout HomeCalc's tools are the standard CMHC-insured mortgage-lending limits. Credit card issuers, auto lenders, and personal-loan lenders each set their own internal debt-service policies, which are not publicly standardized the way mortgage-insurer limits are.

Does this calculator check my credit?

No. This is based entirely on what you enter — it is not a credit check, and HomeCalc does not connect to Equifax, TransUnion, or any credit bureau. Your actual credit report may show different balances or additional accounts.

Should I pay off debt before applying for a mortgage?

Paying down or consolidating high-payment debt — especially a credit card or line of credit near its limit — lowers your TDS ratio and can meaningfully increase how much mortgage you qualify for, since every dollar of required monthly debt payment competes with housing costs against the same income. A car loan or personal loan with a fixed payment and a fixed payoff date has a smaller effect the closer it is to being paid off. Whether it's worth paying down debt versus keeping cash for your down payment depends on your specific numbers — there's no universal answer.

How much does a car loan or credit card reduce my mortgage-qualifying amount?

There's no fixed dollar answer — every dollar of monthly car loan or credit card payment competes for the same TDS 'room' as mortgage payment, so a larger existing debt payment lowers your maximum qualifying mortgage. The exact tradeoff depends on your income, your housing costs, and the stress-test qualifying rate that applies to your mortgage. Add or remove a debt row here and watch how your TDS ratio moves, or use the Mortgage Qualifier Calculator to see your specific maximum mortgage amount with and without a given debt.

Does this calculator handle debts I share with a spouse or co-signer?

Enter the full monthly payment for any debt you're jointly responsible for, even if someone else usually pays it — lenders generally count the full payment on a jointly held debt against each co-signer's TDS, not a prorated share, unless you can document that the other party has exclusively made every payment for a set period (policies vary by lender). If you're applying jointly, use combined household income and combined debts for the most realistic picture.

How is a debt-to-income ratio different from a credit score?

They measure different things. Your credit score reflects your repayment history, credit mix, and credit utilization over time, reported by Equifax or TransUnion. Debt-to-income (TDS) measures whether your current income can support your current housing costs plus debt payments, based on the numbers at the moment you apply. A strong credit score doesn't offset a TDS ratio over the lender's limit, and a good TDS ratio doesn't compensate for a poor credit history — lenders check both.