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The Total Debt Service (TDS) ratio is the percentage of a borrower’s gross annual income needed to cover housing costs (PITH) plus all other recurring debt payments — car loans, credit cards, lines of credit, and other loans. For insured mortgages in Canada, lenders generally require a TDS of 44% or less, calculated at the qualifying rate.
TDS takes the same housing costs used in the GDS ratio — principal, interest, property taxes, heat, and 50% of condo fees — and adds every other debt payment the borrower carries: car loans and leases, credit card minimum payments, lines of credit, student loans, and support payments. It answers a broader question than GDS: can this borrower carry the home and everything else they owe?
Because TDS captures the borrower’s full debt picture, it is almost always the tighter of the two ratios — TDS is rarely lower than GDS, since it starts from the same housing costs and adds more on top. Like GDS, TDS is calculated using the minimum qualifying rate, not the contract rate the borrower actually pays.
TDS = ( PITH + Other debt payments ) ÷ Gross monthly income
Insured mortgages: CMHC, Sagen, and Canada Guaranty cap TDS at 44% alongside the 39% GDS maximum for default-insured files.
Stress-tested like GDS: TDS is calculated at the minimum qualifying rate — the greater of the contract rate + 2 percentage points or 5.25% — under OSFI Guideline B-20.
Conventional files vary: uninsured lenders set their own internal TDS limits under B-20; some alternative and private lenders allow higher ratios in exchange for rate or equity.
Who calculates it: mortgage agents (Ontario, FSRA), submortgage brokers (BC, BCFSA), mortgage associates (Alberta, RECA), and courtiers hypothécaires (Quebec, AMF) run TDS alongside GDS before submitting a file to a lender.
A household earning $95,000 gross per year ($7,917/month) carries a car loan and credit cards on top of its housing costs:
$3,200 ÷ $7,917 = 40.4%. This file would also need to pass GDS at 39% using housing costs alone.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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