Canadian lenders don't run one debt ratio against your income — they run two, and both use figures that catch people off guard the first time: heating costs and half your condo fee count as housing expenses, even though neither shows up on a mortgage statement.
The Two Ratios
GDS (Gross Debt Service): your total monthly housing costs — mortgage payment (principal and interest), property tax, heating, and 50% of any condo fee — divided by gross monthly income. The commonly applied ceiling is 39%.
TDS (Total Debt Service): everything in GDS, plus every other debt obligation — car loans, student loans, credit card minimums, lines of credit — divided by gross monthly income. The commonly applied ceiling is 44%.
Both ratios are calculated using your stress-tested qualifying rate, not your actual contract rate — a detail covered in full in our Stress Test Calculator, but one that matters here too, since it means your GDS/TDS payment inputs are higher than what you'll actually pay.
Worked Example
A household with $12,500 gross monthly income ($150,000/year), a stressed mortgage payment of $3,325 (on a $520,000 loan at a 5.99% qualifying rate), $220/month property tax portion, $120/month heating, and a $300 condo fee (50% = $150 counted):
| Item | Monthly | Counts Toward |
|---|---|---|
| Stressed mortgage payment | $3,325 | GDS + TDS |
| Property tax | $220 | GDS + TDS |
| Heat | $120 | GDS + TDS |
| 50% of condo fee | $150 | GDS + TDS |
| GDS Subtotal | $3,815 | 30.5% |
| Car loan | $450 | TDS only |
| Credit card minimums | $180 | TDS only |
| TDS Total | $4,445 | 35.6% |
This household clears both ceilings comfortably — 30.5% GDS against the 39% cap, and 35.6% TDS against the 44% cap — leaving genuine room even after the stress-tested payment is included.
Common Mistakes
Buyers frequently forget heat and condo fees entirely when self-estimating affordability, since neither appears as a line item on a mortgage quote — but both get added directly into the ratio a lender actually uses.
Buyers also assume GDS and TDS use their real contract rate. They don't — both ratios are calculated at the stress-tested qualifying rate, which is typically 2 percentage points above the contract rate (or the 5.25% floor, whichever is higher). This is a large part of why a rate that looks affordable on paper can still fail to qualify.
A third mistake: condo buyers assuming the full condo fee counts. Only 50% is included in GDS/TDS, though some lenders may use 100% if the condo corporation's reserve fund is flagged as insufficient — worth confirming with your lender directly.
Where This Calculator Has Limits
It uses the standard 39%/44% guideline ceilings, but individual lenders sometimes apply stricter or slightly more flexible internal limits, especially for insured versus uninsured mortgages or non-federally-regulated lenders like provincial credit unions, which aren't bound by the same OSFI rules.
Frequently Asked Questions
Are 39% and 44% hard limits everywhere?
They're the commonly applied guideline ceilings for federally regulated lenders, but some lenders — particularly credit unions not regulated by OSFI — may apply different limits.
Why does heat count as a housing cost?
It's treated as a fixed, unavoidable cost of maintaining the home, similar to property tax, and lenders build it into the housing-cost side of the ratio.
Does my down payment size affect GDS/TDS?
Indirectly, yes — a larger down payment lowers your loan amount and stressed payment, which lowers GDS and TDS proportionally.
What if I fail TDS but pass GDS?
This is common — it usually means non-housing debt (car loans, credit cards) is the limiting factor. Paying down or consolidating that debt before applying can resolve it without changing anything about the home purchase itself.
Does combining income with a co-borrower help?
Yes — combined household income and combined debt are used for joint applications, which is often the most direct way to bring both ratios into range.
Related Tools
Stress Test Calculator · Affordability Calculator · Mortgage Calculator
Educational content, not financial or credit advice. GDS/TDS ceilings are OSFI guideline figures for federally regulated lenders and can vary by institution — confirm your specific ratios and eligibility with a licensed Canadian mortgage professional. Written by the MortgagePro Global team.