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Mortgage Squad Advisors
Qualification

TDS

Total Debt Service ratio

All your monthly debt obligations (mortgage + property tax + heating + credit cards + loans + 50% condo fees) as a percentage of gross income. Most lenders cap TDS at 44% on insured files.

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

Most insured lenders cap TDS around 44%, while alternative and private lenders stretch well past that 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.

Lenders calculate TDS at the higher stress-test qualifying rate, not your actual rate, so the payment they test you against is larger than the one you'll pay. Our affordability calculator runs both GDS and TDS the way underwriters do.

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See also

GDSDebt service ratioStress test

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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.

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.

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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