Your TDS takes into account monthly housing expenses plus other debts and loans you may have.
To calculate your Total Debt Service Ratio (TDS):
|Take your monthly gross (before tax) income ||$__________________ |
|Multiply it by the maximum TDS ratio (40%) x .40 ||$__________________ |
|Subtract your regular monthly expenses (e.g. credit cards, car payments, personal loans) ||– $__________________ |
|This is the maximum amount available for your mortgage payment, property taxes and 50% of condo fees (if applicable) ||= $__________________ |
Example: Ben and Kate have a gross family income of $80,000 per year, or $6,700 per month. They also have two car payments totalling $650 per month, a student loan of $100 per month, and credit card payments of $100 per month. They can apply no more than $1,830 of their monthly income to housing costs ($6,700 x 40% = $2,680 – $850 = $1,830).