# What are the key debt service ratios and how are they calculated?

> Debt service ratios are vital metrics lenders use to assess your client's capacity to manage mortgage payments and other debt.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/what-are-the-key-debt-service-ratios-and-how-are-they-calculated

## Answer
| Ratio | Calculation | Includes |
|---|---|---| 
| GDS | (Principal + Interest + Property Taxes + Heating + Condo Fees) / Gross Income | Housing-related costs |
| TDS | GDS + All other debt payments / Gross Income | All debt obligations |

## Institutional highlights
- Your Gross Debt Service (GDS) ratio is your housing costs (mortgage payment, taxes, heat, condo fees) divided by your gross income.
- Your Total Debt Service (TDS) ratio is your GDS plus all other debt payments (loans, credit cards) divided by your gross income.
- Lenders will check your GDS and TDS to make sure you can still afford your mortgage if interest rates go up.
- If you have a mortgage with default insurance, the insurer sets the maximum GDS and TDS they will allow.
- To qualify for a mortgage without default insurance, you'll need to prove you can afford the interest rate on your mortgage plus a buffer, or a set minimum rate.

## Related guide
- https://ratellow.com/guides/self-employed-success-purchasing

## Sources
- Guarantors and co-signors of mortgages — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.2
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation