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GDS & TDS Calculator — Canadian Debt Service Ratios
GDS (Gross Debt Service) is the share of your gross income that goes to housing costs — mortgage payment, property tax, heat and half of any condo fees. TDS (Total Debt Service) adds every other debt payment. Canadian lenders generally cap GDS at 39% and TDS at 44%, calculated at the stress test rate rather than your contract rate. This calculator produces both ratios and shows which one limits your approval.
Short answer
What are GDS and TDS ratios, and what do lenders allow?
Gross debt service measures your housing costs — mortgage payment, property tax, heat and half of any condo fee — against your gross income. Total debt service adds every other monthly obligation, including credit cards, loans, lines of credit and support payments. Lenders apply maximum ratios that vary by whether the mortgage is insured and by how strong the rest of the file is, and both ratios are calculated using the stress-test rate rather than your actual rate.
Income, housing costs and debts
Annual housing costs
Lenders count 50% of condo fees toward your ratios.
Monthly debt payments
Credit card balances count at 3% of the balance per month, whether or not you pay them in full.
Within standard lender limits
Tested at 6.79% — the greater of your rate plus 2% or 5.25%.
Lender limit 39%
Lender limit 44%
- Monthly income
- $11,667
- Payment at your rate
- $3,133
- Payment at the qualifying rate
- $3,781
- Taxes, heat & condo share
- $450
- Other debt payments
- $540
- Ratios at your actual rate
- 30.7% / 35.3%
Estimates only. Some lenders allow higher ratios for strong applicants, and alternative lenders go further again at a higher rate.
Results are estimates for general guidance only and do not constitute an offer of credit. Actual figures depend on lender policy, credit history, and verified documentation. Call (604) 780-5173 for exact numbers.
Key takeaways
- GDS limit is generally 39% and TDS limit 44% for insured mortgages.
- Both ratios use the qualifying rate — the greater of your contract rate plus 2% or 5.25% — not the rate you actually pay.
- Half of condo fees, all of property tax and an estimated heating cost are included in GDS, even though they are not part of the mortgage payment.
- Credit card balances count at 3% of the balance each month, whether or not you pay in full.
- Whichever ratio hits its limit first is the one capping your mortgage; clearing consumer debt only helps if TDS is the binding one.
- Some lenders and most alternative lenders allow higher ratios for strong applicants, at a higher rate.
What goes into each ratio
GDS counts only what it costs to keep the home. TDS counts that plus everything else you owe. Both are measured against gross income — income before tax — which is why the percentages look lower than the share of your take-home pay they actually consume.
- GDS = (mortgage payment + property tax + heat + 50% of condo fees) / gross monthly income
- TDS = GDS costs + car loans, lines of credit, student loans, support payments and 3% of credit card balances
- Heating is estimated by the lender, commonly $100 to $150 a month for a house
- Rental income from a suite is usually added back at 50% to 80%, depending on the lender
- Self-employed income is normally averaged over two years of filed returns
Why the stress test changes your ratios
Federally regulated lenders must qualify you at the greater of your contract rate plus two percentage points or 5.25%. If your rate is 4.79%, the ratios are calculated on a payment at 6.79% — roughly 15% higher than the payment you will actually make.
This is why an applicant whose real budget is comfortable can still fail. The gap between the contract payment and the tested payment is the single biggest reason approvals come in lower than buyers expect.
Which ratio is limiting you
If GDS hits 39% before TDS reaches 44%, the property itself is the constraint — a lower price, lower property tax, or a building with smaller condo fees is what moves the needle. Paying off a car loan will not help.
If TDS is the binding ratio, consumer debt is the constraint. Every $100 of monthly payment eliminated frees roughly $18,000 of borrowing room. Clearing a $500 car payment can add close to $90,000 to your maximum, which is usually faster than saving another year for the down payment.
When lenders allow more
The 39/44 limits apply to insured mortgages. On uninsured deals with 20% or more down, many lenders will consider 42/46 or higher for applicants with strong credit, stable income and meaningful savings. Credit unions are provincially regulated and set their own policies, which sometimes means more flexibility.
Alternative and private lenders can go well beyond these ratios, but at rates one to four percentage points higher plus a lender fee. That is a reasonable bridge for a year or two while income or credit improves — it is an expensive place to stay long term.
Worked example
Example: $140,000 household income, $550,000 mortgage
| Gross monthly income | $11,667 |
|---|---|
| Mortgage payment at 4.79% | $3,131 |
| Payment at the 6.79% qualifying rate | $3,780 |
| Property tax ($4,200/yr) | $350 |
| Heat | $100 |
| GDS (stress tested) | 36.0% — within the 39% limit |
| Car payment | $450 |
| 3% of a $3,000 credit card balance | $90 |
| TDS (stress tested) | 40.6% — within the 44% limit |
This applicant qualifies, with TDS the tighter of the two. Clearing the car loan would drop TDS to 36.7% and free roughly $80,000 of additional borrowing room if they wanted a larger mortgage.
Frequently asked questions
What is a good GDS and TDS ratio in Canada?
Under 39% GDS and 44% TDS meets standard lender limits. Below 32% GDS and 40% TDS is considered comfortable and gives you room to absorb a rate increase at renewal.
How do you calculate GDS?
Add the monthly mortgage payment at the qualifying rate, monthly property tax, estimated heating, and half of any condo fees. Divide by gross monthly income and multiply by 100. Gross means before tax.
What is the difference between GDS and TDS?
GDS covers housing costs only. TDS adds every other monthly obligation — car loans, lines of credit, student loans, support payments and 3% of credit card balances. TDS is always the higher of the two.
Can I get a mortgage with a TDS over 44%?
Sometimes. Uninsured deals with 20% or more down and strong credit can be approved above 44% by some lenders, and credit unions set their own limits. Alternative lenders go higher again at a rate premium plus a fee.
Do credit cards affect my mortgage approval if I pay them off monthly?
Yes. Lenders count 3% of the outstanding balance shown on your credit report as a monthly payment, regardless of whether you clear it. Paying balances down before the report is pulled directly improves your TDS.
Is rental income included in the debt service calculation?
Usually. Most lenders add 50% to 80% of documented rental income to your gross income, or subtract it from the housing cost, depending on their policy. A signed lease and two years of filed returns produce the best treatment.
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