Helping your clients understand Gross Debt Servicing (GDS) and Total Debt Servicing (TDS) can guide them in determining what they can afford, how to qualify for RFA loans, and how to optimize their borrowing power.

Gross Debt Servicing (GDS)
GDS is the percentage of a borrower’s gross monthly income (before taxes and deductions) that goes toward housing expenses. This should not exceed 39% of their income.

Included in GDS:

Mortgage payments (principal & interest)

Property taxes

Heating costs

Condo or HOA fees

Note: Required documentation may vary by case.

Total Debt Servicing (TDS)
TDS reflects the percentage of a borrower’s gross monthly income needed to cover all debt obligations, including housing costs. This ratio should not exceed 44%.

Debts included in TDS (but not limited to):

Student loans

Car loans

Credit cards

Lines of credit

Installment loans

Personal loans

Other mortgages/properties

Revolving credit

Closing costs

Alimony or child support

Note: Documentation requirements may differ depending on the case.