Total Debt Service Ratio

The debt service ratio calculation used to determine how much you can afford to pay each month to own a property and fulfill your other debt commitments. Your lender adds up your monthly mortgage payment, property taxes, utilities and minimum debt repayments, and divides the total by your gross monthly income. If the answer equals less than 40 per cent (industry standard), your lender can feel confident in your ability to make all of your monthly payments. The maximum TDS allowed is 44%.