# How do lenders use GDS and TDS to determine if I qualify for a mortgage?

> Lenders use GDS and TDS ratios to evaluate your ability to handle debt obligations, with willingness and capacity being primary credit decision factors.

Category: Regulatory
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/regulatory/how-do-lenders-use-gds-and-tds-to-determine-if-i-qualify-for-a-mortgage

## Answer
Lenders use GDS and TDS ratios to evaluate your ability to handle debt obligations, with willingness and capacity being primary credit decision factors. FRFIs have established debt serviceability metrics in their Residential Mortgage Underwriting Policy (RMUP) to guide affordability assessments.

## Institutional highlights
- Lenders follow rules to make sure you can comfortably afford your mortgage.
- If you have mortgage insurance, the insurer sets the rules for how much debt you can handle.
- If you don't have mortgage insurance, lenders will look at your current and future finances to decide if you qualify for a mortgage.
- To qualify for a mortgage without insurance, you'll need to prove you can afford an interest rate higher than what's offered, or a minimum rate.
- The government reviews this higher qualifying interest rate regularly and can change it.

## Related guide
- https://ratellow.com/guides/gds-tds-qualifying-ratios

## Sources
- Debt service coverage — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.3
- Page 3 — https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/new/cmhc-quick-reference.pdf#page=3
- 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