Rental Construction Financing Initiative.National Housing Strategy Project Profiles.The rental income that you can use should be based on either a two-year average from lease agreements, or on fair market rent for new units. For example, Sagen (Genworth) only allows 100% of the gross rental income to be considered if your credit score is above 680. If it is a two-unit owner-occupied property, which means that you are living in the property that you are also renting out, then you can apply 100% of the gross rental income as your gross income.Īlternative private mortgage insurers may have different policies. Taxes and heating costs would not be included in your housing cost calculation. If you are applying for a mortgage on an investment rental property, CMHC only allows 50% of your gross rental income from that property to be used towards your gross income. The CMHC allows your net rental income to be used when calculating your gross income if you are not applying for a mortgage for the rental property that you are earning rental income from. The result is your TDS ratio.Ĭan I use rental income when applying for a mortgage? Combine this with your monthly housing costs, then divide by your monthly gross income. To calculate your TDS ratio, add up all of your monthly debt payments. For example, if you have an outstanding balance of $1,000 on your credit card and unsecured LOCs, then you would use at least $30 (plus interest) as your monthly payment when calculating your TDS ratio, even if your actual minimum payment is lower.ĬMHC also considers secured lines of credit to be amortized over 25 years when calculating its monthly payment amount. The CMHC considers your credit card and unsecured line of credit monthly payments as the greater of the actual minimum payment or a minimum of 3% of the outstanding balance plus interest. Additional debt payments used in the TDS calculation include payments for credit card debt, line of credit debt, car loans or leases, and other loans. It includes debt payments in addition to your housing costs as a percentage of your income. Total Debt Service (TDS) is a generalized version of GDS. The result is your GDS ratio or housing expense ratio. Gross income is your income before any income taxes or deductions. Next, divide your monthly housing costs by your monthly gross income. Then, add all of your housing costs together. You can also use a property tax calculator to estimate your monthly property tax payments.

If you are planning to take out a high ratio mortgage, you will need to include CMHC insurance premiums in your calculation. You can find out this amount by using a mortgage calculator.

To calculate your GDS ratio, you will need to know how much your mortgage payments will be. For your HOA or condominium fee, only half is included, while the full amount is included for your site rent or ground rent. Monthly housing costs used in the GDS calculation include your monthly mortgage payment, property taxes, utility bills (including heating costs), half of your condo fee, and other applicable rental fees or homeowners’ association fees.

It is also called the housing expense ratio. Gross Debt Service (GDS) ratio is your housing costs as a percentage of your income.

Monthly housing expenses calculator