GDS and TDS ratios: the key to approval
Before you even tour homes, banks look at these two ratios. Understanding them helps you strengthen your mortgage application in Canada.
GDS — Gross Debt Service
GDS (ABD in French — Abondement brut de la dette) is the percentage of your gross income needed to cover housing costs only.
TDS — Total Debt Service
TDS (ATD in French) is broader. It includes your housing costs plus all other debts: car, cards, lines of credit, student loans.
The key limits
For a typical approval in Canada (with or without mortgage default insurance), lenders usually work within these ranges.
32% if credit score < 680 · 39% if score 680+
40% if credit score < 680 · 44% if score 680+
Concrete example
Gross annual income: $80,000
Gross monthly income: $6,667
What counts in TDS?
Many buyers forget these items — they can weigh heavily in the calculation.
Car loans
The full monthly payment is used, not the balance.
Credit cards
Often calculated as 3% of the balance — even if you pay in full each month.
Lines of credit
Some unused lines are still factored in.
Student loans
The required minimum monthly payment is included.
Improve your ratios before you apply
Pay down balances
Prioritize small credit card balances. That reduces the notional 3% monthly payment that inflates TDS.
Avoid new purchases
Do not finance a car or furniture before your mortgage closes at the lawyer or notary.
Larger down payment
A bigger down payment reduces the loan amount and mortgage payment — directly improving GDS.
Calculate your ratios now
Use our interactive calculator to estimate your GDS and TDS in real time.
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