Finance & Money
Debt-to-Income Ratio
Calculate your DTI — the key metric lenders use to approve loans.
Debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward debt payments. Lenders use it to assess risk. In Canada, the Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio are the two key benchmarks.
Total Debt Service (TDS)
34.0%
- gds
- 26.7%
- tds Status
- Lender Approved Zone
- monthly Debt
- $2550
Formula and method
TDS = (All Monthly Debt Payments / Gross Monthly Income) × 100
CMHC guidelines require GDS ≤ 39% and TDS ≤ 44% for insured mortgages. GDS covers housing costs only (mortgage P+I, property tax, heat). TDS adds all other debt obligations.
Worked examples
First-time buyer assessment
- Gross Monthly Income ($):
- 8000
- Monthly Mortgage/Rent ($):
- 2200
- Car Loan Payment ($):
- 350
- Credit Card Min. Payments ($):
- 100
- Other Debt Payments ($):
- 0
Total Debt Service (TDS): 33.1%
Over-extended buyer
- Gross Monthly Income ($):
- 6000
- Monthly Mortgage/Rent ($):
- 2000
- Car Loan Payment ($):
- 600
- Credit Card Min. Payments ($):
- 300
- Other Debt Payments ($):
- 200
Total Debt Service (TDS): 51.7%
Assumptions and limits
- CMHC standard guidelines
- Canadian mortgage qualification rules
This tool provides an educational estimate. Rules, rates and personal circumstances can change the answer. Review the assumptions before relying on a result. Report a correction.
Common mistakes to avoid
- Using net income instead of gross — lenders use gross income for DTI calculations.
- Forgetting to include property taxes and heat in the GDS calculation.
- Ignoring minimum credit card payments — even unused credit cards with balances affect TDS.
Frequently asked questions
What DTI do I need to qualify for a mortgage?
Under CMHC rules for insured mortgages, your GDS must be ≤ 39% and your TDS must be ≤ 44%. Conventional (uninsured) mortgages may have stricter lender-specific limits.
How can I lower my DTI?
Either increase income (a second income, raise) or reduce debt payments. Paying off credit cards or a car loan before applying for a mortgage can meaningfully shift your DTI.
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