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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 and interest computed at the OSFI B-20 stress-test rate (the greater of contract + 2 percentage points or the 5.25% minimum qualifying rate the federal bank regulator sets), 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 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

Sources: OSFI, Office of the Superintendent of Financial Institutions(2)
Review dates, licence and how to cite this entry
Rule effective
2018-01-01
Last verified
2026-11-06
Next scheduled review
2027-02-26
Cite this fact

Use any of these formats. Codex content is licensed under CC BY 4.0 — attribution required.

BibTeX — LaTeX, academic
@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      = {2026-11-06},
  note         = {Fact ID: osfi.b20.stress_test, version 2.}
}
APA — Press, journalism
Job, B. (2018). OSFI Guideline B-20 mortgage stress test. *BC Real Estate Codex*. Retrieved 2026-11-06, from https://www.bronsonjob.com/codex#osfi.b20.stress_test
Plain link — Slack, email, Twitter
OSFI Guideline B-20 mortgage stress test — Bronson Job PREC, BC Real Estate Codex (2026-11-06). 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

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.

Bronson Job PREC, REALTOR® at Momentum Realty Inc.. GVR Member #6015742 · FVREB Member #FJOBBR