# How do lenders assess my ability to manage mortgage payments?

> Lenders evaluate your ability to manage payments using Gross Debt Service (GDS) and Total Debt Service (TDS) ratios.

Category: Renewal
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/renewal/how-do-lenders-assess-my-ability-to-manage-mortgage-payments

## Answer
### Key Components of GDS/TDS Calculations

| Factor                      | Description                                                                                                        |
| --------------------------- | ------------------------------------------------------------------------------------------------------------------ |
| Principal & Interest        | Monthly mortgage payment.                                                                                        |
| Income                      | Gross monthly income before taxes.                                                                                 |
| Heating Costs               | Estimated monthly heating expenses.                                                                              |
| Property Taxes              | Annual property taxes divided by 12.                                                                              |
| Condo Fees                  | Monthly condominium fees, if applicable.                                                                          |
| Other Credit Facilities     | Monthly payments for all other debts (credit cards, loans, etc.).                                                  |
| Qualifying Rate             | Used for uninsured mortgages; higher of contractual rate + buffer, or minimum set rate.                                 |

## Institutional highlights
- Lenders look at your income and debts to see if you can afford your mortgage payments.
- These calculations include a buffer to make sure you can handle higher interest rates or unexpected expenses.
- To qualify for a mortgage, you need to prove you can afford your payments at your actual interest rate plus a buffer, or a set minimum rate.
- This rate is reviewed regularly to make sure it's still a good measure of affordability.
- Your mortgage payment, income, heating costs, property taxes, condo fees, and other debts all factor into whether you qualify for a mortgage.

## Related guide
- https://ratellow.com/guides/variable-trigger-points

## Sources
- Property appraisals — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.4.2
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- Debt service coverage — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.3