Total Debt Service (TDS) ratio

« Back to Glossary Index

The percentage of the borrower’s income needed to cover all housing costs (mortgage payments, property taxes, heat and half of any condo fees), plus the cost of servicing other debts (car payments, credit card interest, lines of credit, loans, etc.).

Traditionally, the maximum allowable TDS ratio has been approximately 40%. Today, it can be as high as 44% on insured mortgages (for applicants with high credit scores). A minority of lenders allow even higher TDS ratios on conventional mortgages.

You can estimate your own TDS ratio here.

« Back to Glossary Index