See how housing costs and other monthly debt payments affect TDS, with a clear worked example and practical refinance payoff checks.
What does TDS measure?
Total Debt Service (TDS) compares monthly housing costs plus other required debt payments with gross qualifying household income. Gross Debt Service (GDS) looks at housing costs alone. Use income before tax that the lender accepts for qualification, rather than take-home pay. Keep the time periods consistent: divide annual income by 12 when calculating monthly ratios. FCAC explains the two ratios.
TDS = (monthly housing costs + other monthly debt payments) ÷ gross monthly qualifying income × 100.
Build the numerator carefully
Housing costs include the mortgage principal-and-interest payment used for qualification, property taxes, heating and the applicable condominium fee portion. CMHC includes 50% of condo fees, where applicable. Other obligations can include vehicle loans, student loans, credit cards, lines of credit and support payments. Use the lender's required payment treatment; a credit-card statement minimum may not be the amount used for qualification.
The mortgage payment used in the ratio can be higher than the contractual payment when a stress test applies. Check the qualifying rate and amortization before comparing results. See CMHC's calculation guidance and FCAC's stress-test explanation.
A simple worked example
Assume accepted gross income of $120,000 a year, or $10,000 a month. The qualifying mortgage payment, taxes, heat and applicable condo portion total $3,000 monthly. Other monthly debt payments total $750.
| Calculation | Result |
|---|---|
| GDS: $3,000 ÷ $10,000 × 100 | 30.00% |
| TDS: ($3,000 + $750) ÷ $10,000 × 100 | 37.50% |
The 7.50 percentage-point gap comes entirely from the other debt payments. With the same income and housing costs, every additional $100 of monthly debt payments adds one percentage point to TDS. Removing $250 of ongoing payments would bring this example to 35.00%, provided no other inputs change.
Read the result in context
CMHC publishes maximum ratios of 39% GDS and 44% TDS for its mortgage-insurance assessment. These are useful benchmarks, not universal limits for every mortgage product. Lender and product criteria vary, and a ratio below a benchmark does not guarantee approval. Income acceptability, credit, property and transaction requirements still matter. Review CMHC's published limits.
Paying debts off during a refinance
In MyMortgageMate, repayment choices model a planned settlement:
- Keep payment: the debt payment remains in ongoing TDS.
- From proceeds: the payoff balance reduces available mortgage proceeds; its payment is excluded on the assumption the debt is settled.
- Before funding: the borrower uses separate funds. Show that cash requirement separately, without deducting it from mortgage proceeds again.
A $25,000 debt balance is a settlement amount; a $485 monthly payment is an ongoing obligation. They belong in different calculations. If you increase the new mortgage to fund the payoff, its higher qualifying payment must also feed the ratios. Confirm the lender accepts the proposed settlement and obtain the required evidence.
Check the complete scenario
Enter the figures in the residential calculator, review the qualifying rate, and compare the itemized payout table with the remaining cash. Use the same assumptions in each scenario and inspect the printed synopsis. Avoid counting a settled debt payment twice or omitting a debt that will remain outstanding.
Put the figures into a scenario
Use the appropriate assumptions, compare the results and save a summary for your file.
Open the Residential Calculator →Sources and review
References checked September 22, 2026. Examples are illustrative; confirm the lender, insurer and program requirements for your situation.