Debt Ratios

One of the many criteria used to decide lending eligibility is your debt ratios. Along with evaluating the risk criteria, debt ratios measures your ability to repay the mortgage by ensuring your total debt - including car payments, student loans, credit card bills, etc. - does not exceed a certain percentage of your income. These percentages are called your debt ratios.

Are you ready to buy a home? Figure out how much you can afford using the CIBC Mortgage Affordability Calculator.

What are common debt ratios?

The total debt service ratio (TDSR) is the percentage of gross annual income required to cover all other debts and loans in addition to the cost of servicing the property and the mortgage (principal, interest, taxes, heat etc.).

The gross debt service ratio (GDSR) is the percentage of the total of annual mortgage Ratio (GDSR) payment (principal, interest, taxes, heat and half of condominium common element costs, if applicable, plus secondary financing payment and ground rent if applicable) relative to annual household income.

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