What Is Total-Debt-Service Ratio?

The total debt service ratio (TDS) looks at the income needed to cover your monthly housing costs (GDS Ratio) and all other debts such as credit cards, auto loans, lines of credit etc.

Most lenders allow a maximum of 44% to cover your total expenses.  Borrowers with lower credit scores might be restricted to 40% but every lender has different policies.

TDS Ratio =

$1,418 (mortgage) + $240 (property taxes) + $100 (heating) + $340 (strata) + $420 (car loan)


$7000 (gross monthly income)

= 35.97 %

The TDS in this example is 35.97 % and under the 44% allowed by most lenders.

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