In Quebec, your mortgage borrowing capacity depends on two key ratios: GDS (Gross Debt Service) and TDS (Total Debt Service). These ratios determine the maximum amount lenders will approve. Here’s how to calculate and optimize them in 2026.
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1. GDS and TDS defined
The GDS ratio (Gross Debt Service), called ABD in French (amortissement brut de la dette), measures the share of your gross monthly income dedicated to housing costs. CMHC sets the maximum at 39%.
The TDS ratio (Total Debt Service), called ATD in French (amortissement total de la dette), includes housing costs plus all your other monthly debts. CMHC sets the maximum at 44%.
GDS (ABD) — max 39%
Includes: mortgage payment + property taxes + heating + 50% of condo fees (if applicable).
TDS (ATD) — max 44%
Includes: GDS + car loan + minimum credit card payments + student loan + any other debt.
To understand your overall borrowing capacity, read our guide to mortgage borrowing capacity in Quebec 2026.
2. Calculation formulas
Here are the formulas used by lenders and CMHC to assess your mortgage qualification:
GDS Formula
GDS = (Mortgage Payment + Property Taxes + Heating) ÷ Gross Monthly Income
Result must be ≤ 39%
TDS Formula
TDS = (Mortgage Payment + Taxes + Heating + Other Debts) ÷ Gross Monthly Income
Result must be ≤ 44%
Important: banks use the stress test rate (contract rate + 2% or 5.25%, whichever is higher) to calculate these ratios. Learn more in our article on the mortgage stress test 2026.
3. Concrete example
Let’s look at a concrete example to understand how GDS and TDS ratios determine your maximum borrowing capacity.
Scenario: $110,000/year income, $450/month car debt
• Gross monthly income: $110,000 ÷ 12 = $9,167/month
• GDS max (39%): $9,167 × 0.39 = $3,575/month for housing
• Estimated property taxes: $300/month
• Estimated heating: $125/month
• Max mortgage payment: $3,575 − $300 − $125 = $3,150/month
TDS verification (44%)
• TDS max: $9,167 × 0.44 = $4,033/month
• Housing costs + debts: $3,575 + $450 = $4,025/month
• Actual TDS: $4,025 ÷ $9,167 = 43.9% ≤ 44% ✓
With a $110,000/year income and $450/month car debt, the maximum borrowing capacity is approximately $485,000 (25-year amortization, 5.25% stress test rate).
4. Comparison table by income
Here is the approximate borrowing capacity based on gross annual income (25-year amortization, 5.25% stress test rate, no other debt):
| Gross Annual Income | GDS Max (39%) | Max Capacity | Monthly Payment |
|---|---|---|---|
| $80,000 | $2,600/mo | $340,000 | $2,175/mo |
| $100,000 | $3,250/mo | $430,000 | $2,725/mo |
| $120,000 | $3,900/mo | $525,000 | $3,275/mo |
| $150,000 | $4,875/mo | $670,000 | $4,100/mo |
* Approximate amounts. Property taxes estimated at $300/month, heating $125/month. No other debt included.
5. Strategies to improve your ratios
If your ratios exceed the thresholds, here are the most effective strategies to improve your mortgage qualification:
Pay off existing debts
Prioritize paying off your car loan or credit cards. Every $100/month of eliminated debt adds approximately $15,000 to your capacity.
Increase your down payment
A 20%+ down payment eliminates the CMHC premium and reduces the monthly mortgage payment, improving your ratios.
30-year amortization
If your down payment is 20%+, a 30-year amortization reduces the monthly payment by approximately 10%, improving your ratios.
Add a co-borrower
A co-borrower’s income is added to yours, increasing the ratio denominator and improving qualification.
A mortgage broker can analyze your situation and find the lender offering the best terms for your profile. Some lenders accept higher ratios for excellent credit profiles.
Calculate your mortgage qualification with a broker.
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