# What exactly are GDS and TDS ratios, and how are they calculated?

> Gross Debt Service (GDS) and Total Debt Service (TDS) ratios are vital metrics Federally Regulated Financial Institutions (FRFIs) use to assess a borrower's ability to manage debt.

Category: Regulatory
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/regulatory/what-exactly-are-gds-and-tds-ratios-and-how-are-they-calculated

## Answer
Gross Debt Service (GDS) and Total Debt Service (TDS) ratios are vital metrics Federally Regulated Financial Institutions (FRFIs) use to assess a borrower's ability to manage debt. GDS calculates your mortgage payments plus property costs as a percentage of your gross income, while TDS includes all other debts, like credit card payments.

## Institutional highlights
- Lenders look closely at your finances and may use a higher interest rate than you'll actually pay, just to be safe.
- If you need mortgage insurance, there are limits to how much of your income can go towards housing costs.
- Private mortgage insurers also have rules about how much debt you can handle to qualify for their insurance.
- Lenders generally want to see that your debt levels are comfortably below their maximum allowed amounts.
- Your mortgage payments, property taxes, heating, condo fees, and other debts all affect how much you can borrow.

## 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