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Mortgage Squad Advisors
Qualification

GDS

Gross Debt Service ratio

Your housing costs (mortgage payment + property tax + heating + 50% of condo fees) as a percentage of gross income. Most lenders cap GDS at 39% on insured files, 44%+ at alt lenders.

GDS is the housing-only ratio: mortgage principal and interest, property tax, heating, and half of any condo fees, divided by gross income. It answers 'can you afford the home itself?' before other debts enter the picture.

Insured files generally cap GDS around 39%; alternative and credit-union lenders stretch higher. Like all ratios, it's tested at the stress-test qualifying rate, so the payment counted is larger than your actual one.

If your GDS is the binding constraint, a longer amortization or a larger down payment helps most. If TDS is the problem instead, paying down other debts is the lever. Our affordability calculator shows which one is holding you back.

Related on Mortgage Squad Advisors

See also

TDSDebt service ratioStress test

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More on Qualification

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Co-signer

A creditworthy individual (often a parent) who agrees to be equally liable for the mortgage so the primary applicant qualifies. The co-signer's income is added to the application; their credit is fully exposed.

Credit score

A 300–900 score from Equifax or TransUnion summarizing your credit history. 680+ unlocks most A-lender rates. 600-680 typically routes to alt or B lenders.

Debt service ratio

The percentage of your gross income that goes to housing (GDS) or all monthly debt obligations (TDS). OSFI's stress test caps GDS at 39% and TDS at 44% on insured files.

Down payment

The cash you put toward the purchase. Minimums: 5% on the first $500K, 10% on $500K–$1M, 20% above $1M. Below 20% requires CMHC, Sagen, or Canada Guaranty insurance.

Qualifying rate

The stress-test rate you must qualify at: the greater of your contract rate plus 2% or 5.25%. Doesn't change what you actually pay — only whether you qualify.

Stress test

The mandatory check that you'd still qualify if rates rose to a higher "qualifying rate." Set by OSFI as greater of your contract rate + 2% or 5.25%. Limits how much you can borrow.

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