What Is a TDS Ratio?
The Total Debt Service (TDS) ratio is a key affordability metric used by Canadian lenders to assess a borrower's capacity to carry debt. It expresses your total monthly debt obligations as a percentage of your gross monthly income, before taxes.
For anyone applying for a mortgage in Mexico through a Canadian lender, TDS is one of the primary numbers that will shape your application outcome.
What TDS Measures
Your TDS ratio captures the full picture of your monthly debt load. It includes:
Your proposed new mortgage payment (principal and interest)
Property taxes on the subject property
Heating costs
Any existing debt obligations — credit cards, car loans, lines of credit, student loans, and other mortgages
The formula is straightforward:
What a Strong TDS Ratio Looks Like
Canadian lenders generally look for a TDS ratio between 40% and 44%, though acceptable thresholds can vary depending on the lender, the loan product, and the borrower's overall profile. Some institutional lenders apply stricter guidelines; others have more flexibility for well-qualified borrowers with significant assets or strong income documentation.
As a general rule:
Under 40% — Strong. Most lenders will view this favourably and it gives you meaningful buffer.
40–44% — Acceptable for most lenders, depending on the full application picture.
Above 44% — May require additional qualification considerations or offsetting factors.
The lower your ratio, the more comfortably you can carry new debt, and the more favourably a lender is likely to view your file.
What This Means for You
Your TDS ratio will be one of the primary metrics used to evaluate your SoBankable application. Knowing where you stand before you apply gives you a clearer picture of what you qualify for — and a stronger foundation going into the process.