What is the difference between GDS and TDS?

GDS includes only housing costs like mortgage, property tax, heat, and condo fees. TDS includes all of that plus your other debt payments such as car loans and credit cards, giving a fuller picture.

What is a good TDS ratio?

Many lenders look for a TDS of about 44% or lower. The lower your ratio, the more room you have in your budget and the stronger your application.

How can I improve my TDS ratio?

Reduce or pay off other debts, increase your income, or lower your housing costs. Even paying down a credit card or line of credit before applying can meaningfully improve your TDS.

Mortgage Glossary

What is TDS (Total Debt Service) Ratio?

The Total Debt Service (TDS) ratio measures the share of your gross monthly income that goes toward housing costs plus all your other debt obligations. It includes mortgage payments, property taxes, heating, and any condo fees, then adds payments on loans, credit cards, and other debts. Lenders generally look for a TDS of around 44% or lower.

Find my best mortgage Back to glossary

Quick answer

Also known as: TDS, Total Debt Service Ratio

Key points

TDS measures housing costs plus all other debt payments against gross income.
Lenders commonly look for a TDS around 44% or lower.
It expands on GDS by adding loans, credit cards, and other obligations.
Paying down non-housing debt can lower your TDS and boost borrowing power.
Acceptable limits vary by lender and whether the mortgage is insured.

TDS (Total Debt Service) Ratio explained

TDS builds on the Gross Debt Service (GDS) ratio by adding your non-housing debt payments. While GDS captures only housing costs, TDS captures the full picture of your monthly obligations: car loans, lines of credit, student loans, minimum credit card payments, and support payments, on top of mortgage, property tax, heat, and applicable condo fees.

Lenders use TDS alongside GDS to judge whether you can comfortably carry a new mortgage without being overextended. A common guideline is a TDS limit of roughly 44%, though acceptable thresholds vary by lender, mortgage type, and whether the mortgage is insured. A lower TDS signals more room in your budget and a stronger application.

What a TDS (Total Debt Service) Ratio is for

TDS exists to give lenders a complete view of your debt load, not just your housing costs. By including every recurring obligation, it helps lenders confirm you have enough income left over to manage the mortgage along with everything else you owe.

How it can help you

Knowing your TDS before you apply helps you see how existing debts shrink your borrowing power and where paying down a balance could help most. Reducing a car loan or credit card balance can lower your TDS and improve your approval odds. Lenderoo shops 40+ lenders for free, letting you compare lenders whose TDS guidelines may differ.

When it comes up

A buyer with a healthy GDS still gets a tighter approval because a car loan and a line of credit push their TDS toward the limit. Paying off the line of credit before applying lowers their TDS and increases the mortgage they qualify for.

Example: Calculating TDS

A household earns $8,000 gross per month. Their proposed housing costs (mortgage, property tax, and heat) total $2,400. They also pay $500 on a car loan and $200 in minimum credit card payments.

Total monthly obligations are $2,400 + $500 + $200 = $3,100. Dividing by $8,000 gives a TDS of about 39%, comfortably under the roughly 44% guideline. If their other debt payments were instead $1,200, total obligations would be $3,600 and TDS would rise to 45%, which could push the application over a lender's limit.

Have a question about tds (total 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

TDS (Total Debt Service) Ratio: frequently asked questions

Common questions Canadians ask about tds (total debt service) ratio.

Keep learning

Related mortgage terms

GDS (Gross Debt Service) Ratio

Percentage of income needed for housing costs.

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

Credit Score

A numerical rating of creditworthiness

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 TDS (Total Debt Service) Ratio?

Find my best mortgage Back to glossary

Quick answer

Also known as: TDS, Total Debt Service Ratio

Key points

TDS measures housing costs plus all other debt payments against gross income.
Lenders commonly look for a TDS around 44% or lower.
It expands on GDS by adding loans, credit cards, and other obligations.
Paying down non-housing debt can lower your TDS and boost borrowing power.
Acceptable limits vary by lender and whether the mortgage is insured.

TDS (Total Debt Service) Ratio explained

What a TDS (Total Debt Service) Ratio is for

How it can help you

When it comes up

Example: Calculating TDS

A household earns $8,000 gross per month. Their proposed housing costs (mortgage, property tax, and heat) total $2,400. They also pay $500 on a car loan and $200 in minimum credit card payments.

Have a question about tds (total 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

TDS (Total Debt Service) Ratio: frequently asked questions

Common questions Canadians ask about tds (total 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