# How do GDS and TDS ratios impact debt consolidation approvals?

> Gross Debt Service (GDS) and Total Debt Service (TDS) ratios are crucial for lenders to assess a borrower's debt management ability.

Category: Renewal
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/renewal/how-do-gds-and-tds-ratios-impact-debt-consolidation-approvals

## Answer
Key ratio components:

| Ratio            | Calculation Components                                                                     |
|------------------|---------------------------------------------------------------------------------------------|
| **GDS**          | Principal, interest, property taxes, heating costs, and **50% of condominium/strata fees**.         |
| **TDS**          | All GDS components plus payments for all other credit facilities.                           |
| **Stress Testing** | Ratios should be appropriately stressed for varied economic conditions and higher rates. |

Remember, GDS and TDS ratios should be calculated conservatively.

## Institutional highlights
- Your Gross Debt Service (GDS) ratio looks at your mortgage payment (principal and interest), property taxes, heating, and condo fees.
- Your Total Debt Service (TDS) ratio includes everything in your GDS, plus all your other debt payments like credit cards and loans.
- Lenders will check that you can still afford your payments if interest rates go up or your financial situation changes.
- If you have a mortgage with less than a 20% down payment, the mortgage insurer has rules about how much debt you can carry.
- Even if you have a larger down payment, lenders will still carefully assess your ability to repay your mortgage based on current and future economic conditions.

## Related guide
- https://ratellow.com/guides/debt-consolidation-renewal

## Sources
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Debt service coverage — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.3
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1