Qualification ratio that adds other debt payments to housing costs when measuring affordability.
Total debt service ratio, or TDS, measures how much of a borrower’s gross income goes toward housing costs plus other debt obligations.
TDS shows whether the borrower can handle the mortgage alongside existing obligations such as car loans, lines of credit, student debt, or credit-card payments. It is often the ratio that tightens the file when non-housing debt is already heavy.
TDS includes the same housing costs that feed into gross debt service ratio, then adds other recurring debt payments. The total is divided by gross income to produce a percentage.
Like GDS, the acceptable range depends on the lender, insurer, product, and overall file quality. It is not a promise that a borrower at the edge of the ratio will be comfortable in real life.
$$ \text{TDS} = \frac{\text{Housing Costs} + \text{Other Monthly Debts}}{\text{Gross Monthly Income}} \times 100% $$
| Item | GDS includes it? | TDS includes it? |
|---|---|---|
| Qualifying mortgage payment | Yes | Yes |
| Property taxes | Yes | Yes |
| Heating | Yes | Yes |
| Part of condo fees | Often yes | Often yes |
| Car loan payment | No | Yes |
| Credit card minimum payment | No | Yes |
| Student loan payment | No | Yes |
| Line-of-credit payment | No | Yes |
A borrower may have an acceptable housing-cost ratio but still fail TDS because of a large car payment and monthly line-of-credit obligation.
Using the same $10,000 gross monthly income and $3,900 housing costs from the GDS example, add:
That produces:
$$ \text{TDS} = \frac{3{,}900 + 950}{10{,}000} \times 100% = 48.5% $$
In that case, the mortgage itself is not the only issue. The broader debt load is what tightens the file.
TDS is not only about the mortgage. It is about the mortgage plus other debts.
Borrowers also sometimes assume that if they can make the payment today, the lender should approve the file. Underwriting looks at the broader debt picture and often uses a higher qualifying payment under the stress test.
Debt treatment can vary by lender and file type, especially where revolving balances, co-signed debts, or business obligations are involved.