Debt Service Ratios (GDS & TDS) in Canada, Explained
Two simple percentages decide how big a mortgage you qualify for. Here’s how Gross and Total Debt Service ratios work — and how a Calgary mortgage broker uses them to get you the most home you can comfortably afford.
What are debt service ratios?
Debt service ratios measure the share of your gross (before-tax) income that goes toward housing and debt payments. Lenders use them to make sure you can comfortably carry a mortgage without being stretched too thin. There are two, and your application has to satisfy both.
GDS vs TDS: what counts in each
GDS looks only at housing costs. TDS takes everything in GDS and adds your other debt payments. Here’s exactly what’s included:
| Cost | In GDS? | In TDS? |
|---|---|---|
| Mortgage principal & interest | Yes | Yes |
| Property taxes | Yes | Yes |
| Heating costs | Yes | Yes |
| ½ of condo fees | Yes | Yes |
| Car loans, credit cards, lines of credit, support payments | No | Yes |
GDS = housing costs ÷ gross income. TDS = (housing costs + all other debt) ÷ gross income. Lenders generally cap GDS at 39% and TDS at 44%; some alternative lenders stretch TDS higher.
Factors that can change your ratios
- Rental income: for an investment property, CMHC allows 50% of gross rent toward your income; Sagen can allow 100% if your credit score is above 680 — which can meaningfully improve your ratios.
- Income that doesn’t count: lenders generally can’t use Employment Insurance or social assistance as qualifying income; they want stable income expected to continue.
- Heating & taxes: lenders build in an estimate for heat and property tax, so the home itself affects your GDS.
- Credit-card balances: a portion of your balance counts as a monthly payment in TDS, so paying cards down before you apply can lift your maximum.
How a Calgary mortgage broker helps with your ratios
The same income can qualify for very different amounts depending on the lender and how the file is structured. We:
- Calculate your GDS and TDS before you shop, so you know your true budget.
- Match you to the lender whose rental-income and debt rules work in your favour.
- Show you which debts to pay down first to unlock more borrowing power.
- Use alternative lenders with higher TDS limits when it makes sense.
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Frequently asked questions
What is a good GDS and TDS ratio?
What’s the difference between GDS and TDS?
Does credit-card debt affect my ratios?
Can rental income improve my ratios?
What income can’t be used to qualify?
Curious what you’d qualify for?
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Free · No credit check to start · No obligationThis article is general information, not financial, mortgage or legal advice. Ratio limits and lender policies vary and are subject to change and lender approval. Please speak with a licensed mortgage professional about your specific circumstances. Mortgages for Less with INDI Mortgage.