Total Debt Service (TDS) Ratio
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%.
The Total Debt Service (TDS) ratio is the percentage of your gross monthly income consumed by all debt obligations: housing costs (mortgage, property tax, heat, 50% of condo fees) plus credit card minimum payments, car loans, student loans, and other debt obligations. CMHC and most lenders cap TDS at 44%. TDS is the binding constraint for borrowers with meaningful non-housing debt. A borrower with $10,000 gross monthly income can have up to $4,400 in total debt service. Like GDS, TDS is calculated at the Minimum Qualifying Rate (stress test rate).
Related Terms
The percentage of your gross income consumed by housing costs — mortgage payment, property tax, heat, and 50% of condo fees. Limit is typically 39%.
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.