Total Debt Service Ratio (TDS)
Also known as: TDS · TDS ratio · Total debt service · Debt service ratio
A federal mortgage qualification ratio measuring all annualized debt obligations (housing costs plus car loans, credit cards, lines of credit, student loans) against gross household income — generally capped at 44% under OSFI Guideline B-20 lender practice.
Total Debt Service (TDS) is the share of a borrower's gross annual income consumed by ALL debt obligations at the qualifying rate, not just housing. The numerator includes everything in the GDS calculation (mortgage P&I at the stress-test rate, property tax, heat, 50% of strata) PLUS minimum payments on car loans, credit cards (typically 3% of balance), lines of credit (typically 3% of balance), student loans, and any other reportable debt. Federally-regulated lenders generally cap TDS at 44% for high-ratio CMHC-insured deals; uninsured deals can stretch but rarely past 50%.
TDS is a lender-policy threshold, not statute — enforced through OSFI Guideline B-20 and CMHC underwriting. Lenders qualify on the worse of GDS or TDS: a borrower with a manageable mortgage but a $700/month car payment can fail TDS while passing GDS. Practitioner reality: paying off a car loan or credit-card balance in the weeks before mortgage application is the single most effective lever to fix a TDS-constrained pre-approval — much higher leverage than chasing a 5-bps rate improvement. The 44% threshold is tested at the qualifying rate; cash-flow at the contract rate is typically more comfortable.
Related terms
- Gross Debt Service Ratio (GDS) — A federal mortgage qualification ratio measuring annualized housing costs (mortgage P&I, property tax, heat, plus 50% of strata fees) against gross household income — generally capped at 39% under OSFI Guideline B-20 lender practice.
- 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
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@misc{bronsonjob-osfi_b20_stress_test,
author = {Job, Bronson},
title = {{OSFI Guideline B-20 mortgage stress test}},
howpublished = {BC Real Estate Codex},
year = {2026},
url = {https://www.bronsonjob.com/codex#osfi.b20.stress_test},
urldate = {2026-05-08},
note = {Fact ID: osfi.b20.stress_test, version 1.}
}Job, B. (2026). OSFI Guideline B-20 mortgage stress test. *BC Real Estate Codex*. Retrieved 2026-05-08, from https://www.bronsonjob.com/codex#osfi.b20.stress_test
OSFI Guideline B-20 mortgage stress test — Bronson Job, BC Real Estate Codex (2026-05-08). https://www.bronsonjob.com/codex#osfi.b20.stress_test
Fact id: osfi.b20.stress_test · v1 · machine-readable: /api/v1/facts/by-id/osfi.b20.stress_test.json
Verified sources (1)Click 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 2026-05-08Guideline B-20: Residential Mortgage Underwriting Practices and Procedureshttps://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b20.aspx
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