Glossary
Total Debt Service
Total Debt Service is the share of gross monthly income that goes to housing costs plus all other debt payments..
Total Debt Service (TDS) is the percentage of gross monthly income that a Canadian mortgage lender expects a borrower to spend on housing costs plus all other debt payments combined. In everyday use the term is shorthand for the Total Debt Service Ratio (TDS), one of the two debt service ratios used to underwrite a mortgage.
How TDS fits with GDS
Lenders look at debt service in two layers. The Gross Debt Service Ratio (GDS) covers housing only: mortgage principal and interest, property taxes, heating, and half of condo or strata fees where those apply. Total Debt Service adds everything else reported on the credit bureau, including car loans, student loans, credit card minimums, lines of credit, and any new payment tied to the purchase. A high TDS can sink an application even when GDS looks comfortable.
Why the stress test changes the number
Under the federal mortgage stress test, federally regulated lenders must qualify a borrower at the greater of the contract rate plus a buffer, or a set floor rate. Both GDS and TDS are recalculated at that qualifying rate rather than the rate the borrower will actually pay, so the TDS a lender sees is usually higher than the real-life version. OSFI's Guideline B-20 sets this expectation for federally regulated lenders, while CMHC, Sagen and Canada Guaranty apply their own requirements to insured mortgages. Lenders may allow limited exceptions when compensating factors are strong, such as a larger down payment or a long, clean credit history.
An illustrative calculation
Assume gross monthly income of $8,000, housing costs of $2,400, and $800 in other debt payments:
- GDS: $2,400 ÷ $8,000 = 30%
- Other debt payments: $800
- TDS: ($2,400 + $800) ÷ $8,000 = 40%
A ratio like that often sits inside commonly cited guideline ceilings, but the ceiling that applies depends on the lender, the insurer, and whether the mortgage is insured or uninsured. Confirm the current limits with the lender before relying on them. Our guide to GDS and TDS ratios walks through the full calculation, and the affordability calculator lets you test different debt levels.
Frequently asked questions
Is Total Debt Service the same as the TDS ratio?
Yes. In Canadian mortgage use, "Total Debt Service" almost always refers to the Total Debt Service Ratio (TDS). Lenders read it alongside the Gross Debt Service Ratio to judge affordability. TDS includes housing costs plus every other debt payment on file, while GDS covers housing costs alone.
What is a good TDS ratio in Canada?
There is no single number that guarantees approval. Lenders and default insurers commonly work with guideline ceilings, and insured mortgages are often assessed more tightly than uninsured ones. A lower TDS improves your position, but credit score, down payment size, and income stability all count. Confirm the current limits with your lender.
Does Total Debt Service include my credit card balance?
Lenders typically count the minimum monthly payment reported on revolving credit, not the full balance. Installment debts such as car loans and student loans are usually counted at their actual payment. If a card shows no reported minimum, a lender may estimate one. Paying down or consolidating other debts can lower your TDS.
Sources
Related terms
- Total Debt Service Ratio (TDS) — The Total Debt Service Ratio (TDS) is the share of gross income that goes toward all debt payments, capped at 44% by most Canadian lenders.
- Gross Debt Service Ratio (GDS) — The share of gross household income that goes to housing costs — mortgage principal and interest, property taxes, heating, and half of condo fees — commonly capped at 39%.
- Debt Service Ratio — A measure comparing your housing and other debt payments with your income, used by Canadian lenders when deciding whether you qualify for a mortgage.
- Exception — An exception is a lender’s case-by-case allowance for a strong applicant to exceed a standard mortgage qualification rule.
- Mortgage Stress Test — The federal mortgage stress test is a qualification rule that makes lenders check whether you could afford your mortgage if rates were higher than your contract rate.