Mortgage TDS and GDS

How to estimate affordability

Banks and lenders look at two ratios when determining the mortgage amount you qualify for, which indicate how much you can afford. These ratios are called the Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio. They take into account your income, monthly housing costs and overall debt load.

The first affordability rule, as set out by the Canada Mortgage and Housing Corporation (CMHC), is that your monthly housing costs – mortgage principal and interest, taxes and heating expenses (P.I.T.H.) - should not exceed 32% of your gross household monthly income. For condominiums, P.I.T.H. also includes half of your monthly condominium fees. The sum of these housing costs as a percentage of your gross monthly income is your GDS ratio.

The CMHC’s second affordability rule is that your total monthly debt load, including housing costs, should not be more than 40% of your gross monthly income. In addition to housing costs, your total monthly debt load would include credit card interest, car payments (lease and insurance) , and other loan expenses. The sum of your total monthly debt load as a percentage of your gross household income is your TDS ratio.

Gross Debt Service Ratio

                                                  Mortgage Principal & Interest + Taxes + Heating Expenses         

 Gross Debt Service Ratio =  ____________________________________________________________

                                                                                   Annual Income                             


Ratio should be < 32%

Total Debt Service Ratio

Total Debt Service Ratio


                  Housing Expenses + Credit Card Interest + Car Payments + Loan Expenses

           =   _______________________________________________________________________________

                                              Annual Income

Ratio should be < 40%


Note that while the industry guideline for GDS and TDS is 32% and 40% respectively, most borrowers with good credit and steady income will be allowed to exceed these limits. The maximum allowed is 39% and 44%. The calculator uses these maximums to estimate affordability.

Securing a Mortgage

You've found a home and the next natural step is to secure a mortgage. We're here to help you every step of the way, including finding the best mortgage for you. Michael Tepper, the broker of Nadlan Realty, is a qualified mortgage broker.

Mortgage brokers essentially shop around instead of you, negotiate for you, and come back with the lowest rate on the market. Unlike private individuals, licensed mortgage specialists have access to multiple lenders, credit unions, banks and Private lenders, therefore review various mortgage rates. They receive good rates and discounts because of high quantities of mortgage products, and can pass those discounts directly onto you. 

Who pays a mortgage broker?

The lender providing the mortgage product. Therefore you save money and time looking around and negotiating - with no cost. 

What does a good mortgage entail?

Competitive mortgage products involve not only good rates from a trusted institution. You want favorable terms such as prepayment options to accelerate payments, discharge costs and more. 

We can refer you to verified lenders that we've trusted and worked with for years. 

Types of mortgages:

  • Loans- short term from $50,000 for renovation

  • Bridge loans

  • Refinances Debt Consolidation

  • Interest Only Mortgages

  • Your First Home Purchase and Pre-approvals

  • Cash Back Mortgages  

  • First and Second Mortgage 

Who can get a mortgage?

If you have a steady income and are able to provide the proper documentation that is needed, we'll do our best to find you a good mortgage according to your needs and circumstances. We've helped numerous clients get a great mortgage, whether they were Toronto residents or foreign investors. 

Contact us today for a free consultation!

Nadlan Realty Office  647.476.3076 

MICHAEL TEPPER - B.Sc ; B.Ed דובר עברית

Real Estate Broker      

Credit Assessment

I have always had a passion for real estate. A passion to take it to the highest level as a real estate broker and mortgage broker.  I pride myself in providing great and honest service to my clients. I have built my business through hard work and earning the trust of my clients again and again. If you are looking for a Broker who is willing to listen to you and put your needs always first, please do contact me and I promise to do just that!

- Michael Tepper

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