Gross Debt Service (GDS) Ratio
The percentage of your gross income consumed by housing costs — mortgage payment, property tax, heat, and 50% of condo fees. Limit is typically 39%.
The Gross Debt Service (GDS) ratio is the percentage of your gross monthly income consumed by total housing costs: mortgage principal and interest, property taxes, heating costs, and 50% of condominium fees. CMHC and most lenders cap GDS at 39% for qualifying. For example, a household with $10,000 gross monthly income can allocate $3,900 to housing costs under GDS. GDS is calculated at the Minimum Qualifying Rate (stress test rate), not your contract rate, so qualifying GDS payments are typically higher than your actual payments. GDS works alongside TDS in mortgage qualification.
Related Terms
The percentage of your gross income consumed by housing costs plus all other debt payments — credit cards, car loans, student loans. Limit is typically 44%.
A mortgage qualifying rule requiring borrowers to prove they can afford payments at a rate higher than their actual contract rate — the greater of 5.25% or contract rate plus 2%.
The stress test rate — the greater of 5.25% or your contract rate plus 2 percentage points — used by lenders to qualify you for a mortgage.