Free tool from REMIC
GDS and TDS Calculator with Stress Test
Run a file's debt service ratios the way a Canadian underwriter runs them, at the qualifying rate rather than the contract rate.
Enter income, the mortgage, property taxes, heat and any other monthly debt. The calculator applies the stress test, the fifty percent condominium fee rule and the three percent rule on revolving balances, then shows you where the file lands against insured, conventional and B lender thresholds.
Nothing to sign up for. Nothing saved. Use it on a live deal.
01 / Income
Gross qualifying income
Use qualifying income, not gross revenue. For a self-employed borrower that means income after the add-back method your lender accepts.
02 / Mortgage
Loan terms
Thirty years is available on insured files for first-time buyers on new construction.
Qualifying rate is the greater of contract plus two percent or 5.25 percent.
03 / Housing costs
Taxes, heat and condominium fees
Use the actual bill where you have it.
Most lenders set a minimum. One hundred to two hundred a month is typical.
04 / Other debt
Monthly obligations for TDS
On revolving balances, use three percent of the balance or the actual minimum payment, whichever is higher. The calculator applies three percent of the balance. Some banks apply three percent of the credit limit instead, so check the lender before you rely on a tight number.
Student loans, support payments, instalments.
Where this file lands
Calculating
Results update as you type.
GDS
0.0%
at 0.00% qualifying · 39% insured limit
TDS
0.0%
at 0.00% qualifying · 44% insured limit
How the numbers are built
Lender threshold comparison
Reading the ratios
GDS is housing alone. TDS is housing plus everything else. GDS is the mortgage payment, property tax, heat and the included share of condominium fees, divided by gross monthly income. TDS adds every other monthly debt payment.
The stress test is a qualifying floor, not a rate the borrower pays. Federally regulated lenders qualify at the greater of the contract rate plus two percent or 5.25 percent.
Insured limits are 39 and 44. Conventional files at most A lenders sit tighter, around 35 and 42. B lenders go higher, and credit unions vary.
This calculator is one of 45 in Residential Mortgage Underwriting in Canada. Chapter 11 covers debt service ratios in full, including what belongs in each and how to improve a borrower's numbers.
Where this tool comes from
This is one of 45 calculators in the underwriting program
Residential Mortgage Underwriting in Canada is a three-course program covering the borrower, the property and the deal, and underwriting in practice. Forty-four chapters, written for Canadian files with current figures.
- Debt service ratios taught properly, including what belongs in each and how to improve a borrower's numbers
- A calculator for every chapter, built to use on live deals
- Live file clinics every month where real deals get worked in front of the group
- Ten hours of Professional CE in Ontario per course
How to use this on a live file
Run it before you send, not after
A file that fails on ratios fails the same way at every lender who uses the same thresholds. Running the numbers at the application takes two minutes and tells you whether you are placing an A file, a B file, or a file that needs restructuring first.
Watch the gap between contract and qualifying
The breakdown shows the payment at the contract rate and at the qualifying rate. That gap is what the stress test costs the borrower in qualifying power, and it is usually larger than people expect.
Three things that move a tight file
Amortization, where the product allows it. Paying out or consolidating a revolving balance, since three percent of a card balance can carry more weight than the balance suggests. Adding a co-signer, which changes both the income and the debt sides.
Working on a separation file?
Spousal buyouts run through the same ratios but start with a different calculation, and the equity math changes by province. The spousal buyout calculator is here, also free.
Questions
What is the difference between GDS and TDS?
GDS covers housing costs only: mortgage payment, property tax, heat and the included share of condominium fees. TDS is GDS plus every other monthly debt obligation. Both are expressed as a percentage of gross monthly income.
What rate should I use?
Qualify at the greater of the contract rate plus two percent or 5.25 percent. The contract rate is what the borrower pays. The qualifying rate is what they have to prove they could pay.
Does a 5.25 percent contract rate trigger the 5.25 percent floor?
No, and this is the one people get wrong. The floor applies to the qualifying rate, not the contract rate. At a contract rate of 5.25 percent the qualifying rate is 7.25 percent, because contract plus two is higher than the floor. The floor only binds below a contract rate of 3.25 percent, and under that the ratios stop moving no matter how low the rate goes.
When does the stress test not apply?
Insured straight switches at renewal and same-lender renewals are outside it. Purchases, refinances and switches with any change to the mortgage are still in scope. Provincially regulated lenders set their own policy.
How much of a condominium fee goes into GDS?
Fifty percent at most A lenders. Some insurers and conservative lenders use the full amount. The calculator lets you set either.
How are credit cards and lines of credit counted?
Three percent of the outstanding balance, or the actual minimum payment, whichever is higher. Watch the difference between lenders: monolines generally use three percent of the balance, while several banks use three percent of the credit limit, which is harder on a borrower carrying a small balance on a large card. A balance that never seems to move can carry a surprising amount of weight in TDS.
Is this free to use?
Yes. No sign-up, nothing stored, and you can print the calculation. It is one of the tools from REMIC's underwriting program, published so you can see the standard the material is written to.
What this is. An educational tool for mortgage professionals and for anyone who wants to understand how a lender tests affordability. It is not a mortgage approval, not a pre-approval, and not an offer of financing. Ratios inside the limits shown do not mean a lender will approve the file, and ratios outside them do not always mean a decline.
Policy varies by lender. Thresholds, heating minimums, condominium fee treatment and revolving debt conventions differ between institutions, and insurer rules differ between CMHC, Sagen and Canada Guaranty. Credit unions and other provincially regulated lenders set their own qualifying rules. Confirm current guidelines with your lender before relying on any result.
Figures change. The qualifying rate, the debt service limits and the amortization rules are reviewed and revised. Figures here reflect rules current at publication, verified against OSFI and CMHC.
How the payment is calculated. Canadian semi-annual compounding, the standard convention for a fixed rate Canadian mortgage. Results are rounded for display.
Nothing is stored. Everything you type stays in your browser. No figures are sent anywhere, saved or collected.
© Real Estate and Mortgage Institute of Canada Inc.