Qualification

TDS

Total Debt Service ratio

Total Debt Service ratio: your monthly housing costs (mortgage principal and interest, property tax, heating, 50% of condo fees) plus all other monthly debt payments, divided by gross monthly income. CMHC caps TDS at 44% on insured mortgages.

TDS is the broader of the two debt-service ratios: it captures housing costs plus every other monthly obligation, such as car loans, credit-card and line-of-credit payments, student loans, and support payments. GDS looks only at housing; TDS looks at everything.

Insured files must stay at or under 44% TDS; uninsured lenders set their own limits, and alternative and private lenders may go higher for a stronger down payment or exit plan. Because TDS includes other debts, paying off a car loan or card before you apply can directly raise the mortgage you qualify for.

The mortgage payment in TDS is calculated at the stress-test qualifying rate, not your contract rate. Revolving balances are usually counted at a minimum-payment standard set by the lender or insurer, even if you pay them in full. Our affordability calculator runs both GDS and TDS.

Worked example

Illustrative: gross income $10,000/month. Qualifying mortgage payment $2,800, property tax $450, heat $120: housing $3,370 (GDS 33.7%).

Add a $600 car payment and a $150 credit-card minimum: $3,370 + $750 = $4,120, which is 41.2% TDS, under the 44% insured limit. Add a $400 line-of-credit payment and TDS becomes 45.2%, over the limit, even though GDS hasn't changed.

Illustrative figures only, rounded; not a quote or current rate. See today’s rates on our live board.

Sources

Calculating GDS / TDS (CMHC)
Minimum qualifying rate for uninsured mortgages (OSFI)

Related on Mortgage Squad Advisors

Affordability calculator

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. Roughly 680+ opens the widest range of A-lender options; CMHC-insured mortgages need at least one borrower at 600 or higher; lower scores usually route to alternative (B) lenders.

Debt service ratio

The percentage of your gross income that goes to housing (GDS) or to housing plus all other monthly debt payments (TDS). On insured mortgages, CMHC caps GDS at 39% and TDS at 44%; the ratios are calculated at the stress-test qualifying rate.

Down payment

The cash you put toward the purchase. Minimums: 5% on the first $500K and 10% on the portion from $500K to $1.5M; at $1.5M or more, 20%. Below 20% requires CMHC, Sagen, or Canada Guaranty insurance.

GDS

Gross Debt Service ratio

Gross Debt Service ratio: your monthly housing costs (mortgage principal and interest, property tax, heating, and 50% of condo fees) divided by your gross monthly income. CMHC caps GDS at 39% on insured mortgages; uninsured and alternative lenders set their own limits.

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.

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TDS