GDS / TDS Ratio Calculator

What the GDS / TDS Ratio Calculator does

GDS and TDS are the two ratios every Canadian mortgage lender runs before approving anything. Gross Debt Service measures your housing costs against your income; Total Debt Service adds in every other debt you carry. This calculator runs both exactly the way an underwriter does, using the standard inclusion rules for property tax, condo fees and revolving credit that most people have never seen written down.

It is built for people who already know something is off — a bank has said no, a pre-approval came back lower than expected, or a broker mentioned a ratio and moved on. This page shows the actual numbers, names the binding ratio, and lists specific, quantified changes that would fix it.

• Your GDS and TDS ratios, calculated the same way a lender does
• Pass or fail against both the insured limits (39% / 44%) and the tighter conventional limits (35% / 42%)
• The exact monthly room you have, or the exact monthly shortfall you need to close
• A breakdown of what makes up PITH and your other obligations, so you can see which input is driving the result
• Specific, quantified fixes — how much credit card debt to pay off, how much income to add

The key variables that move the answer — and how lenders treat them

Every input here is treated by an underwriter with a specific inclusion rule, and the rules are not intuitive.

• Proposed mortgage payment — this must be calculated at the stress-test qualifying rate, not your contract rate. Entering your actual, lower payment produces ratios that look better than what a lender will actually see.
• Property tax — counted at 100% in both ratios, and lenders use an estimate based on the property's municipality when an actual assessment is not yet available, which can differ meaningfully from a national average.
• Condo fees — only 50% counts toward your ratios, which is a standard convention across virtually every Canadian lender, even though you pay the full fee every month out of pocket.
• Credit card and line of credit balances — lenders assume a monthly obligation equal to 3% of the balance, not your actual payment. A borrower who pays their card off every month still has that 3% counted against them, because the ratio measures capacity, not behaviour.
• Site and lease fees — apply to leasehold land and mobile or manufactured homes, and are counted at 100%, the same treatment as property tax, because they are a fixed carrying cost independent of the mortgage.

How this is actually calculated in Canada

Monthly gross income M is your annual income divided by twelve. PITH — Principal, Interest, Taxes and Heat — is the proposed housing payment plus property tax divided by twelve, plus a standard heating estimate, plus 50% of any condo fee, plus any site or lease fees. GDS is PITH divided by M.

Other obligations O sum your monthly loan and lease payments, 3% of your credit card balance, 3% of your line of credit balance (for unsecured lines), student loans, support payments, and PITH from any other owned property. TDS is (PITH + O) divided by M.

Both ratios are then checked against a limit: 39% for GDS and 44% for TDS on insured lending. The reverse calculation is just as useful — max PITH at the GDS limit is M × 39%, and max PITH at the TDS limit is M × 44% minus O. The lower of the two is your true ceiling, and whichever one produces the lower number is the "binding" ratio — the one actually constraining your file.

• GDS = PITH ÷ M, where PITH = payment + tax/12 + heat + 50% × condo fee + site fee
• TDS = (PITH + O) ÷ M, where O = loans + 3% × (credit cards + LOC) + other debts
• Max PITH (GDS) = M × 39%; Max PITH (TDS) = M × 44% − O
• Binding ratio = whichever of GDS or TDS produces the lower max PITH

What you get, and how lenders use these numbers to qualify you

These two ratios are not a proxy for underwriting — they are the underwriting, at least for the debt-service portion of a decision. Understanding exactly how they are built tells you where a "no" actually came from.

• GDS pass/fail — the first gate. A GDS failure almost always means the housing payment itself is too high for the income relative to price, tax or condo fees.
• TDS pass/fail — the second gate, and the more common failure point, because it captures every other debt on your credit bureau. A TDS-only failure means the mortgage itself would be affordable if the other debts were not there.
• Binding ratio — tells a broker which lever to pull first. If GDS is binding, a lower price or larger down payment is the fix; if TDS is binding, paying down revolving debt or adding a co-applicant is usually faster.
• Room or shortfall in dollars — this is what turns a percentage into an action. "You are $340 a month over" is something you can actually plan against, unlike a bare percentage.
• Conventional versus insured limits — if you are putting 20% or more down, some lenders apply the tighter 35%/42% limits instead, which is worth checking directly with a broker before assuming the insured limits apply to your file.

Using your results well

If you are failing TDS, run the calculator again with your credit card balance at zero to see exactly how much qualifying room that debt is costing you — it is often a bigger number than people expect, because of the 3% convention. If you are failing GDS, the housing payment itself needs to come down, which usually means a lower price, a larger down payment, or a longer amortization.

What this calculator deliberately does not do is account for credit score, employment stability, or a specific lender's risk appetite — all of which affect a real decision alongside GDS and TDS. Two applicants with identical ratios can get different outcomes from different lenders, which is precisely the situation a mortgage broker is positioned to navigate, because brokers can shop across dozens of lenders with different limits and different risk tolerance.

• If TDS is binding, model paying down your highest credit card balance first
• If GDS is binding, model a lower purchase price or a longer amortization
• Check both the insured and conventional limits if you are putting 20% or more down
• Use the housing-payment figure at the qualifying rate, not your contract rate, for an accurate result
• Take a failing result to a broker rather than a single bank — different lenders apply different limits

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