What is a good debt ratio?

To obtain a mortgage, an excellent debt ratio is no more than 32%, while a good ratio is between 32% and 36%. If your debt ratio is higher, you represent a greater risk to the lender, and may have difficulty obtaining a mortgage.

How to interpret the debt ratio?

Ideally, your debt ratio should be less than 32% for Gross Debt Service Ratio (GDS) and less than 40% for Total Debt Service Ratio (TDSR). However, with a higher debt ratio, but within CMHC limits, you can still get a mortgage.

What is the ideal debt ratio?

The ideal debt ratio for obtaining a mortgage is a GDS ratio of less than 32% and a TDS ratio of less than 40%.

How to analyze a debt ratio?

The debt ratio is a measure of your ability to repay a loan. Banks and other lenders use two debt ratios: Gross Debt Service (GDS) and Total Debt Service (TDS). They then compare your ratios to industry standards.