GDS & TDS Ratios Explained: 2026 Canadian Mortgage Qualification Guide
GDS (Gross Debt Service) measures housing costs as a percentage of gross income; TDS (Total Debt Service) adds all other debt payments to that calculation.
For insured mortgages (under 20% down), the maximum GDS is 39% and the maximum TDS is 44% — these are hard federal limits.
For uninsured mortgages, lenders typically apply the same 39%/44% thresholds, though some have stricter internal overlays based on risk profile.
First-time buyers and new build purchasers may qualify for 30-year amortizations, which lower monthly payments and can improve TDS ratios.
Reducing existing debts before applying is one of the most effective ways to lower your TDS ratio and qualify for a larger mortgage.
GDS and TDS ratios set the limits for how much mortgage you can afford — insured borrowers must stay at or below 39% GDS and 44% TDS.
First-time buyers and purchasers of new builds may qualify for 30-year amortizations, reducing monthly payments and improving your TDS ratio.
Paying down credit cards, car loans, or lines of credit before applying can lower your TDS ratio and unlock a larger mortgage amount.
Expert Research FAQ
What exactly are GDS and TDS ratios, and how are they calculated?
GDS calculates your mortgage payments plus property costs as a percentage of your gross income, while TDS includes all other debts, like credit card payments.
Lenders look closely at your finances and may use a higher interest rate than you'll actually pay, just to be safe.
If you need mortgage insurance, there are limits to how much of your income can go towards housing costs.
Private mortgage insurers also have rules about how much debt you can handle to qualify for their insurance.
Lenders generally want to see that your debt levels are comfortably below their maximum allowed amounts.
Your mortgage payments, property taxes, heating, condo fees, and other debts all affect how much you can borrow.
How do lenders use GDS and TDS to determine if I qualify for a mortgage?
FRFIs have established debt serviceability metrics in their Residential Mortgage Underwriting Policy (RMUP) to guide affordability assessments.
Lenders follow rules to make sure you can comfortably afford your mortgage.
If you have mortgage insurance, the insurer sets the rules for how much debt you can handle.
If you don't have mortgage insurance, lenders will look at your current and future finances to decide if you qualify for a mortgage.
To qualify for a mortgage without insurance, you'll need to prove you can afford an interest rate higher than what's offered, or a minimum rate.
The government reviews this higher qualifying interest rate regularly and can change it.
How can I improve my GDS and TDS ratios to qualify for a larger mortgage?
Paying down existing debts, like credit cards, will lower your monthly obligations; consider exploring options for increasing your income.
Your GDS and TDS are key to showing lenders you can handle your mortgage payments.
When you renew your mortgage, lenders will look at your finances as if you're a new customer.
Lenders will check if you can still afford your payments if interest rates go up or your income goes down.
You'll generally need a credit score of 600 or higher to get approved for a mortgage.
For mortgages with a small down payment, lenders usually want your GDS to be below 39% and your TDS below 44%.
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Frequently Asked
What exactly are GDS and TDS ratios, and how are they calculated?
How do lenders use GDS and TDS to determine if I qualify for a mortgage?
How can I improve my GDS and TDS ratios to qualify for a larger mortgage?
How are GDS and TDS ratios calculated for mortgage qualification?
How does variable income — bonuses, commissions, overtime — affect my mortgage qualification?
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