What costs are included in GDS?

Your mortgage principal and interest, property taxes, heating costs, and half of any condominium fees. These housing costs are divided by your gross monthly income.

What is a good GDS ratio?

Lenders generally prefer a GDS ratio at or below about 39%. The lower it is, the more comfortably you can carry your housing costs and the stronger your application looks.

How is GDS different from TDS?

GDS counts only housing costs, while TDS adds all your other debt payments, such as car loans and credit cards. TDS limits are typically around 44%.

Mortgage Glossary

What is GDS (Gross Debt Service) Ratio?

The Gross Debt Service (GDS) ratio is the share of your gross monthly income that goes toward housing costs, including mortgage payment, property taxes, heating, and half of any condo fees. In Canada, lenders generally want your GDS ratio to be around 39% or less when you qualify for a mortgage.

Find my best mortgage Back to glossary

Quick answer

Also known as: gross debt service, GDS

Key points

GDS measures housing costs as a share of gross monthly income.
It includes mortgage payment, property taxes, heating, and 50% of condo fees.
Lenders commonly look for a GDS ratio around 39% or less.
GDS is paired with the TDS ratio, which also counts your other debts.
Lower GDS generally improves your odds of mortgage approval.

GDS (Gross Debt Service) Ratio explained

GDS measures how much of your income your home would consume. It adds up your expected mortgage principal and interest, property taxes, heating costs, and 50% of applicable condo fees, then divides that total by your gross (pre-tax) monthly income.

Lenders use GDS alongside the Total Debt Service (TDS) ratio to judge whether you can afford a loan. A common guideline is a GDS ceiling of about 39%, though acceptable limits vary by lender and the size of your down payment. Keeping GDS low improves your chances of approval.

What a GDS (Gross Debt Service) Ratio is for

The GDS ratio exists to help lenders confirm that your housing costs are not too large relative to your income. It is a core affordability test that protects both the lender and the borrower from overcommitting.

How it can help you

Knowing your GDS ratio tells you how much home you can realistically carry before you shop, so you do not fall in love with a property you cannot finance. Lenderoo lets you shop 40+ lenders for free, and limits can vary by lender, so comparing helps you find one that fits your numbers.

When it comes up

A buyer calculates their GDS before house hunting. By estimating mortgage payments, taxes, and heating against their income, they set a realistic price range and avoid wasting time on homes that would push their ratio past lender limits.

Example: calculating GDS

Your gross monthly income is $7,000. Your expected housing costs are a $1,800 mortgage payment, $300 in property taxes, and $150 in heating, for a total of $2,250.

GDS = $2,250 / $7,000 = about 32%. That sits comfortably below the roughly 39% guideline, so on the GDS test you are in a strong position. Lenders would still check your TDS ratio, which adds your other debts.

Have a question about gds (gross debt service) ratio?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

GDS (Gross Debt Service) Ratio: frequently asked questions

Common questions Canadians ask about gds (gross debt service) ratio.

Keep learning

Related mortgage terms

TDS (Total Debt Service) Ratio

The percentage of your gross monthly income needed to cover housing costs plus all other debt payments.

Read definition

Debt Service Ratio

The percentage of gross income needed to cover debt payments

Read definition

Stress Test

A federal qualifying rule that requires borrowers to prove they could afford payments at a higher rate than their actual contract rate.

Read definition

Pre-Approval

Conditional approval for a mortgage before house hunting.

Read definition

Property Tax

An annual tax on real estate charged by your municipality.

Read definition

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary

Mortgage Glossary

What is GDS (Gross Debt Service) Ratio?

Find my best mortgage Back to glossary

Quick answer

Also known as: gross debt service, GDS

Key points

GDS measures housing costs as a share of gross monthly income.
It includes mortgage payment, property taxes, heating, and 50% of condo fees.
Lenders commonly look for a GDS ratio around 39% or less.
GDS is paired with the TDS ratio, which also counts your other debts.
Lower GDS generally improves your odds of mortgage approval.

GDS (Gross Debt Service) Ratio explained

What a GDS (Gross Debt Service) Ratio is for

How it can help you

When it comes up

Example: calculating GDS

Your gross monthly income is $7,000. Your expected housing costs are a $1,800 mortgage payment, $300 in property taxes, and $150 in heating, for a total of $2,250.

Have a question about gds (gross debt service) ratio?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

GDS (Gross Debt Service) Ratio: frequently asked questions

Common questions Canadians ask about gds (gross debt service) ratio.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary