Gross Debt Service (GDS) Ratio
Quick Definition
Housing costs as a percentage of gross income — max 39% for CMHC-insured mortgages.
Full Explanation
The Gross Debt Service ratio measures what percentage of your gross monthly income goes toward housing costs: mortgage principal and interest, property taxes, heating costs, and 50% of condo fees if applicable. Canada Mortgage and Housing Corporation (CMHC) requires a GDS ratio of 39% or less for insured mortgages. For example, if your gross monthly income is $8,000 and housing costs total $2,800, your GDS is 35%. Exceeding this threshold can disqualify you from CMHC-insured mortgages.
Related Terms
Total Debt Service (TDS) Ratio
All monthly debt payments as a percentage of gross income — max 44%.
Debt-to-Income Ratio (DTI)
The percentage of your gross income that goes toward debt payments.
CMHC (Canada Mortgage and Housing Corporation)
Federal Crown corporation that provides mortgage default insurance for high-ratio mortgages.
Mortgage
A secured loan used to purchase real estate, with the property as collateral.
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