GDS / TDS Calculator — Canada 2026
Check your Gross Debt Service and Total Debt Service ratios instantly — and get a ranked action plan if your ratios are offside.
A $400/month car payment can reduce your maximum mortgage by $70,000–$90,000. Check your ratios before you apply.
GDS and TDS are the two ratios every Canadian lender uses to decide whether to approve a mortgage. They're effectively the speed limits on Canadian mortgage qualification: GDS caps housing costs at 39% of gross income, TDS caps housing-plus-all-other-debts at 44% of gross income, and you must clear both — at the OSFI stress-test rate, not your contract rate. Miss either ceiling and the deal doesn't close, regardless of credit score, down payment size, or how much income you actually take home.
Most people land on this page because they already suspect they're tight on one ratio — usually TDS, because of a car payment, line of credit, or student loan they haven't paid off. The calculator above tells you where you stand. The content below tells you, in order of impact, what actually moves the ratios: which debts hurt most per dollar, which hurt least, and how lenders count balances vs minimum payments differently. Treat this as the operational guide that comes after "your ratios are 47%/49%, now what."
What Counts in GDS and TDS — Exactly
Both ratios share a denominator (your gross monthly income before tax) but differ in what's in the numerator. The numerator on a real lender's spreadsheet looks like this.
GDS numerator (housing costs only)
- Mortgage payment at the qualifying rate — calculated on the qualifying rate (max of 5.25% or contract + 2%), not your contract rate. This is the single largest line item.
- Annual property tax ÷ 12 — actual MPAC-assessed amount divided by 12 months.
- Heating cost — CMHC's default is $150/month if you don't supply a documented number. Some lenders will accept lower with utility-bill evidence; some apply higher minimums for larger homes.
- 50% of monthly condo fees — only half the condo fee counts. CMHC's reasoning: the rest is for amenities and reserve fund, not "shelter."
TDS numerator (GDS plus all other debt)
Everything in GDS, plus all of these:
- Car loan / car lease monthly payment — full monthly amount.
- Student loan monthly payment — full monthly amount.
- Personal loan monthly payment — full monthly amount.
- Line of credit: typically 3% of the outstanding balance, not the actual minimum payment. A $20,000 LOC balance counts as $600/month even if your real minimum is $50/month. This catches many borrowers off guard.
- Credit card balances: typically 3% of outstanding balance, same logic as LOC.
- Spousal or child support paid out — full monthly amount per court order.
- Co-signed debts: if you co-signed someone else's car loan or mortgage, lenders typically count 100% of those payments against your TDS, even though you're not the primary obligor.
The 3% rule on revolving credit is the single most under-appreciated fact in Canadian mortgage qualification. A buyer who casually carries a $15,000 line-of-credit balance "for emergencies" is giving up roughly $60,000 of qualifying mortgage at typical income levels — about $80,000 of qualifying purchase price. Pay it down before you apply.
The 39% / 44% Caps in Practice
The 39%/44% limits come from CMHC's standard rules for insured mortgages. In real underwriting:
- Strong files (high credit, salaried T4 income, large down payment) sometimes get approved up to but not beyond these caps. Some lenders will push to 42%/46% on exceptional files but these are rare.
- Average files are approved comfortably under the caps — say 35%/40% — and lenders prefer to keep margin in case rates rise at renewal.
- Weaker files (lower credit, variable income, smaller down payment, marginal property) are often subject to internal overlays at 35%/42% or tighter. The 39%/44% caps are CMHC's outer limit; individual lenders frequently apply tighter limits to specific file types.
This means your "yes/no" depends not just on the ratios but on which lender you apply to. Two lenders running the exact same file can come back with different answers, especially on edge cases. This is the single biggest reason mortgage brokers earn their fee — they know which lender's overlay each kind of file fits.
Household: dual income, $130,000 combined gross ($10,833/month). Target home: $700,000 in Mississauga. Mortgage: $675,305 at 4.29% contract / 6.29% qualifying, 25-year amortization. Property tax: $4,800/year. Heating: $150/month CMHC default. No condo (freehold).
Existing debts: car loan at $480/month, student loan at $250/month, line of credit balance of $12,000 (3% rule = $360/month), one credit card balance of $4,000 (3% rule = $120/month).
This applicant fails on GDS alone — they don't even need to add the debts to fail. Adding the debts pushes TDS to roughly 57%, also a clear fail. To make this deal close, this household needs to either drop the target price by ~$120,000 (to about $580K), increase down payment, or add another $30,000+ of qualifying income. Paying off the line of credit and credit card removes $480/month from TDS but doesn't help GDS at all. This is why GDS-binding cases are harder to fix than TDS-binding cases.
Which Debts Hurt Most Per Dollar
If you're tight on TDS, not all debts are equally worth paying off. The leverage depends on whether the debt is reported as an absolute monthly amount (loans) or a percentage of balance (revolving credit).
| Debt Type | How Lender Counts It | $/month per $10K balance | Approx. Mortgage Cost per $10K |
|---|---|---|---|
| Line of credit | 3% of balance | $300 | ~$40,000 |
| Credit card | 3% of balance | $300 | ~$40,000 |
| Student loan (active) | Actual monthly payment | varies; ~$100/month at typical rates | ~$13,000 |
| Car loan | Actual monthly payment | varies; ~$200/month at typical 5-yr term | ~$27,000 |
| Mortgage on rental property | Actual payment minus 50–80% rental offset | varies widely | varies widely |
| Spousal/child support paid | 100% of court-ordered amount | per order | per order |
Approximate impact at ~$120K household income, 4.29% contract / 6.29% qualifying, 25-yr amortization. Real numbers vary with income and lender overlays.
The math says: paying down revolving credit (LOC, credit cards) is dollar-for-dollar the highest-leverage move. $10,000 paid against a line of credit removes $300/month from TDS, which translates to about $40,000 of additional qualifying mortgage. That's a 4× multiplier on every dollar paid down. By contrast, paying $10,000 against a fixed-payment installment loan (car, student) only removes the small monthly payment portion of that, with much smaller leverage.
Two practical implications: (1) before applying, prioritize paying down line-of-credit and credit-card balances over installment loans, even if the installment loans have higher interest rates; (2) if you can't pay debts off entirely, consider consolidating revolving credit into a fixed-term loan — converting $20,000 of LOC balance ($600/month TDS impact) into a 5-year personal loan at $400/month removes $200/month of "phantom" debt service in the lender's eyes.
The Order of Operations to Improve Ratios (Highest Leverage First)
If your calculator output shows you're offside, here's the order most mortgage advisors would attack the problem:
- Pay down or eliminate revolving credit balances. Highest impact per dollar. Aim to bring credit-card and LOC balances to zero or as close as you can manage 60+ days before applying (lenders look at the most recent statement).
- Consolidate revolving credit into installment loans. If you can't pay down, restructure so a smaller monthly amount actually counts. A debt-consolidation loan from a bank or credit union typically costs less in TDS impact than the underlying revolving balances.
- Increase down payment. A larger down payment lowers the qualifying mortgage amount, lowers the qualifying monthly payment, and lowers GDS. Less efficient than debt reduction per dollar but a clean lever if you have savings to deploy.
- Add a strong-file co-applicant. Adds income to the denominator. Be careful — adding a co-applicant who carries their own debt can hurt both ratios.
- Reduce your target price. If the math really doesn't work, the right move may be a smaller home. Lower price means lower mortgage means lower GDS payment.
- Extend amortization to 30 years (if eligible: first-time buyer or new-build buyer on insured mortgages, or any buyer with 20%+ down on conventional). Lower monthly mortgage payment improves both ratios. Trade-off: substantially more total interest over the life of the loan.
- Consider a B-lender if A-lenders decline. B-lenders have looser ratios but charge 1–2% premium rates and lender fees of 1–2% of the loan. Use only as a last resort, ideally as a 1–2 year stepping stone back to A-lender qualification.
How Lender Overlays Change the Math
The 39%/44% caps are CMHC's defaults for insured mortgages. Conventional (uninsured) mortgages with 20%+ down are not bound by these CMHC limits, but lenders apply their own internal overlays that often look similar. Common overlay patterns:
- Big banks — generally apply CMHC defaults on insured files; on conventional files, typically apply 39%/44% as a soft cap with 42%/46% available on stronger files. Internal credit-tier overlays can tighten this for borrowers with credit under 680.
- Monoline lenders — often more flexible on debt-service ratios on insured files because their entire business is mortgages; they price risk in the rate rather than the ratio. Some monolines will go to 42%/46% on insured files for strong-credit borrowers.
- Credit unions — many provincial credit unions are not federally regulated and may apply their own ratios outside CMHC defaults. Some accept ratios up to 45%/50% with sufficient down payment, particularly for self-employed borrowers and rural properties.
- B-lenders — focus less on debt-service ratios and more on equity (loan-to-value). B-lenders may lend at 50%/55% ratios with 20–25% down, but at 1–2% rate premium plus 1–2% lender fees.
The practical implication: a buyer at 41% GDS / 47% TDS who's declined by their bank may still qualify with a different A-lender, a credit union, or a monoline. This is exactly the situation a mortgage broker is most useful for — they can shop your file across lenders without the credit hit of multiple full applications.
Common Mistakes to Avoid
"My LOC has a $50/month minimum payment." Lenders don't care. They calculate 3% of the outstanding balance regardless of your actual minimum. A $30,000 LOC balance = $900/month against your TDS, which can disqualify you on its own. Pay it down or close it before applying.
Paying down a credit card balance reduces your TDS — good. Closing the card after paying it off can hurt your credit score by reducing your overall available credit, which raises your utilization ratio on remaining cards. Pay down balances before applying, but don't close cards in the 6 months before a mortgage application.
If you co-signed a car loan or student loan for a child, family member, or friend, that debt typically counts 100% against your TDS — even if the primary borrower has been paying it reliably for years. The only fix is removing yourself from the loan, which usually requires the primary borrower to refinance into their own name.
50% of condo fees count toward GDS. A $700/month condo fee adds $350/month of GDS pressure — equivalent to about $50,000 less qualifying mortgage. Buyers who shop for condos but ran their affordability against a freehold benchmark often find themselves $30,000–$60,000 short at offer time.
"I'll just take on Uber/DoorDash to qualify." Most lenders won't count gig-economy income unless you have a 2-year average on tax returns showing it as recurring. The same is true for new self-employment income, recently-started commission roles, and short-tenure jobs. Income that isn't taxed as employment income with a 2-year track record often doesn't qualify, no matter how real the cash flow is.
What This Calculator Doesn't Tell You
This is an educational starting point, not a guarantee of approval. It deliberately doesn't model:
- Your specific lender's overlays. Actual approval depends on credit score, employment tenure, property type, and lender-specific rules beyond ratios.
- Rental property math. Investment properties use different ratio calculations (DCR, debt coverage ratio) and different rental offset rules per lender. Owner-occupied multi-unit (where you live in one unit of a 2–4 unit building) follows different rules again.
- Self-employed income calculations. Adding business income to GDS/TDS denominators requires the right tax-return interpretation, which varies by lender. Some accept gross business income, some only T1 net.
- Rate environment changes. The qualifying rate is a snapshot. If BoC or contract rates change before your renewal, your ratio picture changes too.
- Tax adjustments to gross income. Lenders use gross (pre-tax) income. The actual cash flow you live on is much lower; a 47% TDS can feel financially tight even when it's lender-acceptable.
How Much Income Do You Need to Buy a House in Canada?
Your GDS and TDS ratios are driven by income relative to housing and other debts. A household earning $120,000 with minimal debt qualifies for roughly $580,000–$620,000 after the stress test — but add $800/month in debt and that drops to about $500,000. See the full breakdown at every price point in our income needed to buy a house in Canada guide.
See your GDS and TDS ratios instantly — with a ranked action plan if you're offside.
Open Full Calculator →Frequently Asked Questions
What's the difference between GDS and TDS?
GDS (Gross Debt Service) measures only your housing costs as a percentage of gross income — mortgage payment at the qualifying rate, property tax, heating, and 50% of condo fees. The cap is 39%. TDS (Total Debt Service) takes everything in GDS and adds all your other monthly debt payments — car loans, student loans, line of credit (3% of balance), credit cards (3% of balance), spousal support, etc. The TDS cap is 44%. You must pass both to qualify.
How is my line of credit balance counted in TDS?
Most lenders use 3% of the outstanding balance as the monthly debt-service obligation, regardless of your actual minimum payment. A $20,000 line of credit balance counts as $600/month against TDS even if your real minimum is $50/month. This is one of the most consequential and least-known rules in Canadian mortgage qualification — paying down LOC balances before applying is one of the highest-leverage moves you can make.
Do credit card balances count even if I pay them off every month?
Lenders typically pull your credit bureau report at application time and use the balance shown on your most recent statement. If you carry a balance on the statement (even if you're paying it off in full a few days later), that balance counts at 3% against your TDS. Best practice before applying: pay credit cards down to zero a few weeks before your statement closes, then keep them at zero through the application process.
Can I qualify with TDS over 44%?
Sometimes. The 39%/44% caps are CMHC's defaults for insured mortgages. Some A-lenders will go to 42%/46% on conventional (20%+ down) files with strong credit. Some credit unions accept up to 45%/50% with sufficient equity, particularly for self-employed borrowers. B-lenders accept 50%+ ratios but at 1–2% rate premium plus lender fees. The number to aim for is comfortably under the cap rather than at it — most lenders prefer to keep margin.
Does my spouse's debt count against my TDS if we apply jointly?
Yes. On a joint application, both incomes add together (helping the denominator) and both sets of debts add together (hurting the numerator). If your spouse carries significant revolving credit balances, those count against the joint TDS at 3% of balance. Sometimes the math works better as a sole application even though you lose half the income — run it both ways.
Are condo fees the reason I'm tight on GDS?
50% of monthly condo fees count toward GDS. A $700/month condo fee adds $350 to your GDS calculation — roughly $50,000 less qualifying mortgage. Older buildings with high maintenance fees can push borrowers offside on otherwise-affordable units. Worth running the math on a similar-priced freehold or townhouse if your condo is the binding constraint.
If I pay off my car loan, will my mortgage qualification improve immediately?
It improves at your next credit bureau pull. Most lenders re-pull credit at submission, so paying off a car loan a week before applying should remove that monthly payment from your TDS. There's a small lag (typically days to a few weeks) between when you pay off a loan and when the credit bureau reflects the zero balance. If timing matters, get written confirmation of the payoff and provide it to your broker or banker directly.
Why do my ratios fail at the bank but pass with a broker's lender?
Different lenders apply different overlays. Big banks tend to be conservative — adding internal restrictions on credit score, employment tenure, or property type that effectively tighten the 39%/44% caps for many files. Monolines and some credit unions price risk through rate rather than tighter ratios, so they'll approve more files at the standard caps. This is exactly the situation where a broker's value shows up: they know which lender's overlay matches your file and shop accordingly without forcing you through multiple credit applications.
This calculator is for educational purposes only and does not constitute financial, mortgage, or legal advice. GDS and TDS limits shown are CMHC standard guidelines for insured mortgages — individual lenders apply their own overlays that may be tighter or looser depending on file specifics. Revolving credit (line of credit, credit card) is calculated at 3% of outstanding balance, which is the most common but not universal lender practice. Always consult a licensed mortgage professional. ClearKey is not a licensed mortgage brokerage.