In short
It's the first affordability test a lender runs.
For insured mortgages, the limit is generally 39%.
What counts in GDS
GDS compares your monthly housing costs to your gross (pre-tax) monthly household income. Lenders often call the costs PITH: principal, interest, property taxes and heating.
For a condo, 50% of the monthly condo fees is added. The mortgage payment is calculated at the stress test rate, not the rate you'll actually pay, and includes any mortgage insurance premium added to the loan.
Gross income means your income before tax and deductions. For a couple buying together, lenders add both incomes, and both people's debts then count in the TDS.
What is the GDS limit in Canada?
For insured mortgages through CMHC, the maximum GDS is 39%. Other mortgage insurers use similar limits, and lenders set their own for uninsured mortgages, which can be lower.
Being under the limit isn't a target. Many buyers choose a payment well below their maximum to leave room for savings, repairs and life.
GDS is the first of two tests. Your total debt service ratio (TDS) adds every other debt payment and has a 44% limit for insured mortgages. You must pass both.
Lenders also check that at least one borrower has an acceptable credit history. A strong ratio alone doesn't guarantee approval.
The Ottawa angle
Property tax is part of the calculation, so it matters where you buy. The City of Ottawa sets tax rates by property class and location, and your lender will use the actual or estimated tax bill for the home.
Older homes can carry higher heating costs. Lenders are expected to use a reasonable estimate, so ask the seller for utility history if you can.
Your mortgage lender may offer to collect property tax with your mortgage payment and pay the City for you. Either way, the full tax amount counts toward your GDS.
Hydro and water aren't part of GDS, but they still belong in your own budget.
Common questions about gross debt service ratio
What is a good GDS ratio for a mortgage?
For an insured mortgage in Canada, your GDS must be 39% or lower. Lower is more comfortable, since it leaves room for other goals and surprises. Lenders may use their own, sometimes lower, limits for uninsured mortgages. Your ratio is calculated at the stress test rate.
How do you calculate GDS?
Add your monthly mortgage payment at the qualifying rate, property tax, heating and half of any condo fees, then divide by your gross monthly income. Multiply by 100 for the percentage. CMHC's debt service calculator does the math for you. Use gross income, before tax.
Are condo fees included in GDS?
Yes, 50% of monthly condo fees are included in GDS for insured mortgages. The same amount carries into your TDS. Higher fees can noticeably lower the price you qualify for, so check them early. Freehold homes have no condo fees, so this line is zero for them.
What is the difference between GDS and TDS?
GDS covers only housing costs, while TDS adds all your other debt payments. For insured mortgages, the limits are 39% for GDS and 44% for TDS. You need to pass both to qualify. TDS is usually the harder one to meet.
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.