# How are my finances reviewed for mortgage approval?

> Lenders conduct a thorough financial assessment using debt service ratios, such as the Gross Debt Service Ratio (GDSR) and the Total Debt Service Ratio (TDSR), to determine your capacity to manage mortgage payments.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-are-my-finances-reviewed-for-mortgage-approval

## Answer
Understanding GDSR and TDSR:

| Ratio | Calculation                           | Key Components                | Acceptable Range (Typical) |
|-------|---------------------------------------|-------------------------------|---------------------------|
| GDSR  | (Housing Costs / Gross Income) x 100 | Mortgage, Taxes, Heating     | Below 39%                 |
| TDSR  | (Total Debt Payments / Gross Income) x 100 | All Debts, Housing Costs    | Below 44%                 |

## Institutional highlights
- Your mortgage lender looks at how much of your income goes towards housing costs.
- Lenders also check how much of your income goes towards all your debts, including your mortgage.
- You'll need to show you can afford your mortgage even if interest rates go up.
- Your mortgage insurer has guidelines on how lenders calculate if you can afford a mortgage.
- Small changes to your application might be okay without starting over, as long as they fit within certain limits.

## Related guide
- https://ratellow.com/guides/fixed-vs-variable-historical

## Sources
- Weekly series — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#table
- Notes — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#notes
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation