GDS
Gross Debt Service Ratio
Canadian mortgage term definition with formula, examples, and limits used by mortgage brokers.
Definition
Monthly housing costs divided by gross monthly income. Includes mortgage payment, property tax, heating, and 50% of condo fees.
Formula
(Mortgage Payment + Property Tax + Heating + 50% Condo Fees) ÷ Gross Monthly Income
Standard Limit
≤ 39%
Example
If housing costs are $2,000/month and income is $6,000/month, GDS = 33%.
Related Terms
TDSAll monthly debt payments divided by gross monthly income. Includes housing costs plus credit cards, car loans, lines of credit, and other debts.LTVTotal mortgage debt divided by property value. Determines if CMHC insurance is required and which lenders qualify.CMHC InsuranceMandatory mortgage default insurance required when down payment is less than 20% (LTV > 80%). Enables up to 95% LTV financing.Stress TestBorrowers must qualify at a higher interest rate to ensure affordability if rates rise. Calculated as the maximum of contract rate + 2% or 5.25%.Semi-Annual CompoundingCanadian mortgages compound interest twice per year (every 6 months), not monthly like US mortgages. This affects payment calculations.
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