Gross Debt Service Ratio (GDS)
Also known as: GDS · GDS ratio · Gross debt service · Housing cost ratio
The share of your gross income that housing alone takes up: the mortgage payment, property tax, heat, and half of any strata fee. Lenders generally want it under 39%. The mortgage payment in that sum is calculated at the stress-test rate rather than the rate you were quoted, which is the part that catches people out.
Gross Debt Service (GDS) is the share of a borrower's gross annual income consumed by housing costs at the qualifying rate. The numerator includes mortgage principal + interest computed at the OSFI B-20 stress-test rate (the greater of contract + 2 percentage points or the Bank of Canada 5.25% qualifying rate), property taxes, heating costs, and 50% of any strata/condo fees. The denominator is gross (pre-tax) household income from all qualifying sources. Federally-regulated lenders generally cap GDS at 39% for high-ratio (<20% down, CMHC-insured) loans; uninsured deals stretch slightly higher in practice.
GDS is a lender-policy threshold, not a statutory limit — it is enforced through OSFI Guideline B-20 and CMHC underwriting policy rather than legislation. The ratio interacts with Total Debt Service (TDS), which adds non-housing debt payments (car loans, lines of credit, credit-card minimums, student loans). A borrower can fail TDS while passing GDS, or vice versa; lenders qualify on the worse of the two. Note that the 39% threshold is tested at the qualifying rate, not the contract rate — meaning real cash-flow at funding is typically more comfortable than GDS suggests.
Related terms
- Total Debt Service Ratio (TDS) — Gross debt service widened to every debt you carry: car payments, credit cards, lines of credit and student loans on top of the housing costs.
- OSFI Mortgage Stress Test (B-20) — OSFI Guideline B-20 requires federally-regulated lenders to qualify mortgage borrowers at the greater of (a) the contract rate plus 2 percentage points or (b) the Bank of Canada qualifying rate (5.
- CMHC Default Insurance Cap — The maximum home purchase price eligible for CMHC default mortgage insurance — raised from $1,000,000 to $1,500,000 effective December 15, 2024.
See also
Use any of these formats. Codex content is licensed under CC BY 4.0 — attribution required.
@misc{bronsonjob-osfi_b20_stress_test,
author = {Job, Bronson},
title = {{OSFI Guideline B-20 mortgage stress test}},
howpublished = {BC Real Estate Codex},
year = {2018},
url = {https://www.bronsonjob.com/codex#osfi.b20.stress_test},
urldate = {2026-09-05},
note = {Fact ID: osfi.b20.stress_test, version 2.}
}Job, B. (2018). OSFI Guideline B-20 mortgage stress test. *BC Real Estate Codex*. Retrieved 2026-09-05, from https://www.bronsonjob.com/codex#osfi.b20.stress_test
OSFI Guideline B-20 mortgage stress test — Bronson Job PREC, BC Real Estate Codex (2026-09-05). https://www.bronsonjob.com/codex#osfi.b20.stress_test
Fact id: osfi.b20.stress_test · v2 · machine-readable: /api/v1/facts/by-id/osfi.b20.stress_test.json
Verified sources (2)· re-verified 2026-09-05Click to expand
Every claim on this page is sourced to a primary government, regulator, or industry-association URL. We re-verify quarterly; the verification dates below show when each source was last confirmed against the live government page.
- OSFIretrieved 2026-09-05Guideline B-20: Residential Mortgage Underwriting Practices and Procedureshttps://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures
- Office of the Superintendent of Financial Institutionsretrieved 2026-09-05Minimum qualifying rate for uninsured mortgages: "The greater of the mortgage contract rate plus 2% or 5.25%"https://www.osfi-bsif.gc.ca/en/supervision/financial-institutions/banks/minimum-qualifying-rate-uninsured-mortgages
osfi.b20.stress_test · v2View in Codex →License: This definition is licensed under CC BY 4.0. Cite as: "Gross Debt Service Ratio (GDS)", BC Real Estate Glossary by Bronson Job, https://www.bronsonjob.com/glossary/gross-debt-service-ratio.
