March 22, 20263 min read
This decision can affect both approval and the cost of the mortgage for years. GDS and TDS are debt-service ratios lenders use to compare your income with housing costs and total recurring debt obligations.
What changes the outcome
Here is what matters most:
- Gross Debt Service generally focuses on mortgage payments plus qualifying property taxes, heating and a portion of condo fees when applicable.
- Total Debt Service adds other obligations such as loans, credit cards and support payments.
- The mortgage payment used for qualification may be calculated at the stress-test rate rather than the contract rate.
- Maximum ratios depend on lender, insurer and borrower characteristics, so one universal limit should not be assumed.
Knowing your ratios helps identify whether the next dollar should go toward a larger down payment or debt reduction.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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