Capacity to PayThe following two general rules known as the Gross Debt Service Ratio (GDSR) and the Total Debt Service Ratio (TDSR) will assist you in determining what you can afford to borrow when it comes to purchasing your home. |
Gross Debt Service Ratio (GDSR)The first general rule, known as the Gross Debt Service Ratio (GDSR), is to allow no more than approximately 35% of your gross monthly income (before deductions) to cover your monthly mortgage payment. Your monthly mortgage payment calculation includes the mortgage principal, interest, property taxes, heating costs, and 50% of condominium fees (if applicable). |
Total Debt Service Ratio (TDSR)The second general rule, known as the Total Debt Service Ratio (TDSR) is to allow no more than approximately 42% of your gross monthly income to cover your monthly mortgage payment plus any payments you may be making on all other debts, such as car loans and credit cards. |
