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WHAT IS THE MOST I CAN AFFORD ON A TORONTO MISSISSAUGA GTA HOME?

When Banks and Lenders generally approve you for a mortgage they look at GDS and TDS ratios.

What are GDS and TDS Ratios?

GDS means Gross Debt Service. The Gross Debt Service is the maximum percentage of your gross income allowed to pay the costs of carrying your home. This ratio combines your principal and interest mortgage payment, property taxes, heating and condo fees, if applicable. The allowable GDS ratio is generally .32 or 32%.

TDS means Total Debt Service. The Total Debt Service is the maximum percentage of your gross income allowed to pay the costs of carrying your home, plus other debts. This ratio combines everything from the GDS as well as any other outstanding debt obligations (i.e. loans, credit card balances, lines of credit). The allowable TDS ratio is generally .40 or 40%.

Here is a calculator to help you calculate your GDS and TDS ratios like lenders do it. Play with the numbers but remember 32% and 40%.

Monthly Mortgage Payment $
Property Taxes $
Heating Costs $
Condo Fees (if required) $
Total Payments  
Gross Monthly Household Income $

GDS %

  
   
Other Debts (Credit Cards, etc.) $

TDS %