What Is The Gross-Debt-Service Ratio?

The Gross Debt Service Ratio (GDS) looks at the portion of your gross monthly income needed to cover your monthly housing costs for the subject property.  The subject property is the property you are applying for in your application and doesn’t include any other properties owned.

You cannot spend more than 39% of your gross income towards the expenses of the subject property.  This ratio is reduced to 32% for borrowers with lower credit scores.

The subject property expenses include mortgage payment (principal & interest), property taxes, heating costs and any strata fees if applicable.

GDS Ratio =  $1,418 (mortgage payment) + $240 (property tax) + $100 (heating) + $340 (strata)  /

$7,000 (gross monthly income)

= 29.97 %

A GDS of 29.97% is inline with lender’s debt ratios.