Mortgage Glossary

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GDS - Gross Debt Service

Your monthly housing costs are generally not allowed to exceed 32% of your gross monthly income.

Housing costs include - your monthly mortgage payment, and an amount for property taxes and heating. If you are buying a strata property then it will also include 1/2 of your strata fees.
The total of these monthly payments divided by your gross monthly income will give you your Gross Debt Service.

For example:
If your housing costs total $950.00 and your gross monthly income is $4,500.00, then your GDS equals 21.11% - well below the 32% allowed.

However, if your housing costs total $1,550.00 and your gross monthly income is $4,500.00, then your GDS equals 34.44%. In this case it may be possible to extend the amortization (this reduces the mortgage payments), or increase your equity (which lowers the mortgage needed & therefore reduces the mortgage payments). If these options are not available you should look for a cheaper property.

 

     

 

 

 

 

 

 

 

 

 

 

 

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