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Gross Debt Service & Total Debt Service Ratios
Understand Your Debt Ratios with Our Calculator
Discover your gross debt service (GDS) and total debt service (TDS) ratios to assess your financial readiness for a mortgage.
What are GDS and TDS?
GDS and TDS represent gross debt service and total debt service ratios. These percentages of your income cover:
- GDS: Housing-related expenses
- TDS: Housing costs plus other debts
How are GDS/TDS Calculated?
The GDS ratio is determined by dividing your annual income by the sum of housing costs, mortgage payments, property taxes, heating, and condo fees.
The TDS ratio includes the GDS components plus other debt and loan payments, divided by your annual income.
Why are GDS and TDS Important?
These ratios help you and lenders understand how much you can borrow to buy a home. Exceeding recommended thresholds (typically 39% for GDS and 44% for TDS) suggests considering a larger down payment or reducing existing debts. Lenders also use GDS and TDS when assessing mortgage pre-approvals.
Ideal GDS and TDS Ratios
Ideally, your GDS should be below 35%, and TDS below 42%. At Breezeful, we collaborate with over 100 lender partners, supporting ratios up to 45% for GDS, 47% for TDS, and potentially up to 50% with conditions like a 35% down payment.
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