Mortgage Qualification
What Are GDS and TDS Ratios?
These are two of the numbers lenders use to compare your income with the cost of the home and your other monthly debts.
One question. A clear answer.
Gross Debt Service
What Is GDS?
GDS stands for Gross Debt Service. It looks at how much of your gross household income is needed to cover the basic costs of the home.
This usually includes the mortgage payment the lender uses for qualification, property taxes, heating costs, and a portion of condo fees if there are any.
In simple terms, GDS is asking: How much of your income would be going toward the home itself?
Total Debt Service
What Is TDS?
TDS stands for Total Debt Service. It starts with the same housing costs used for GDS, then adds your other monthly debts.
That can include things like car loans, lines of credit, credit cards, student loans and other regular debt payments.
TDS is really asking: How much of your income is already spoken for once the home and your other debts are included?
Planning Insight
Why This Matters
Two people with the same income can qualify for very different mortgage amounts.
Someone with very little monthly debt may have more room for a mortgage. Someone with a large car payment, credit card balances or other monthly debts may qualify for less, even if their income is exactly the same.
This is why income on its own never tells the whole story.
Mortgage Qualification
What Ratios Do Lenders Use?
As a general planning guideline, many mortgage calculations use up to 39% for GDS and 44% for TDS.
The mortgage payment used in these calculations may be higher than your actual payment because lenders also have to qualify you using the mortgage stress test.
Those numbers are useful for estimating, but they are not a guarantee of approval. The lender, mortgage insurer, credit profile, type of income, property and the rest of the application can all affect the final decision.
Helpful Tool
Estimate Your Own GDS and TDS Ratios
Use my GDS & TDS Calculator to see how your gross household income compares with your housing costs and other monthly debts.
What to Explore Next
Continue Exploring
Here are a few related answers, guides, and tools that may help you take the next step.
Personal Guidance
Still Have Questions?
Debt servicing ratios are useful for planning, but they do not always tell the full story. If you have a purchase price in mind, I can look at the actual numbers with you and explain what may be possible.