Your Bank's Mortgage Formula

Using the GDS & TDS to Determine Your Maximum Mortgage

There are two commonly used factors that a bank will consider when determining the amount of mortgage a lender will provide - the GDS and the TDS.

  • Gross Debt Service Ratio (or, GDS)

    This "rule" states that your monthly HOUSING costs must not exceed 32% of your gross family income. To calculate this value, the bank will consider your monthly mortgage payments, your heating costs, your condo fees (if applicable), and property taxes. You must also include any repayments you must make back to your government retirement plan if you borrow against it to make your downpayment.

  • Total Debt Service Ratio (or, TDS)

    This "rule" states that ALL of your monthly costs must not exceed 40% of your gross family income. To calculate this value, the bank will consider all of the same expenses as in your GDS, PLUS, your credit cards, lines of credit, phone bill, cable TV, etc.

Step 1. Your Gross Income

Enter your gross (before taxes) monthy paycheck: ($):  

Your spouse's gross monthy paycheck: ($):  

Any other income you and your
spouse have (from investments, or other sources): ($):  


 A - Your GDS  ($):  

 B - Your TDS  ($):  


Step 2. Your Monthly Expenses

Part a - Housing Costs (Used in GDS Calcs)

Anticipated Property Taxes: ($):  

Anticipated Heating Costs: ($):  

Condo Fees (if applicable): ($):  

Registered Savings Plans Contributions: ($):  


Part b - All other monthly costs (Used in TDS Calcs)

Car payments or car leases: ($):  

Credit card payments: ($):  

Line of credit payments: ($):  

Telephone, Internet & Cable TV: ($):  

Water bill: ($):  

Other loan payments (i.e. student loan: ($):  

Any other monthly payments: ($):  




Step 3. Your Maximum Allowable Monthly Mortgage Payment

Your GDS (from line A in Step 1):  

Your TDS (from line B in Step 1):  

Your Monthly Housing Expenses (from line C in Step 2):  

Your Grand Total of All Monthly Expenses (from line D in Step 2):  

 Maximum Mortgage Payment Allowed - Using Your GDS:  

 Maximum Mortgage Payment Allowed - Using Your TDS:  


Note:  Yellow fields will be calculated for you.

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