Mortgage Approval Ontario 2025: GDS / TDS Ratios Explained

Learn how GDS 39% and TDS 44% limits—and the 2025 stress test—shape your Ontario mortgage approval. We’ll walk you through a real $850K Toronto condo-townhouse example so you can see exactly how lenders measure your debt ratios and what that means for your borrowing power.

Understanding Your Mortgage Approval Amount in Ontario

If you’re aiming for mortgage approval Ontario 2025, you’re likely asking: “How much mortgage can I get approved for?” Knowing your maximum upfront saves time, focuses your home search, and prevents the heartbreak of falling for a property you can’t finance. Whether you’re buying in Toronto, Mississauga, or anywhere across the GTA, federal GDS/TDS guidelines still apply—but with sky-high housing prices, understanding those ratios is essential to avoid surprises.

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How GDS/TDS Rules Shape Mortgage Approval Ontario 2025

Prime lenders use two debt-service ratios to decide how much mortgage you can get approved for in Ontario:

1. Gross Debt Service (GDS) You can devote up to 39% of your gross monthly income to housing costs. That includes:

   • Your mortgage payment (calculated at the qualifying rate)

   • Property taxes

   • Heating

   • 50% of condo fees (if you’re in a condo)

2. Total Debt Service (TDS) You can use up to 44% of your gross monthly income for all debt payments. That covers your housing costs plus:

   • Car loans

   • Credit card minimums

   • Other personal debts

If your GDS or TDS ratios exceed these limits, many prime lenders may decline your application. But don’t worry—strong credit scores, a larger down payment, or other compensating factors can tip the scales in your favor.

Want to know exactly where you stand? Calculate your GDS/TDS now and see how close you are to Ontario’s 2025 mortgage approval thresholds.

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How the Stress Test Works in 2025

Even if your lender offers you an actual mortgage rate of 4.50%, you must qualify at the stress test rate — the higher of your actual rate + 2.00% or the Bank of Canada’s benchmark rate. In this case:

• • Actual rate: 4.50%

• • Stress test rate: 4.50% + 2.00% = 6.50%

This rule (known as OSFI Guideline B-20) ensures you can still afford your payments if rates rise in the future.

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Real Toronto Example – $850K Condo Townhouse Purchase

• Purchase price: $850,000
  Down payment (20%): $170,000
  Mortgage amount: $680,000
  Amortization: 30 years (conventional mortgage)
  Gross annual household income: $160,000 ($13,333/month)
  Car payment: $550/month (Toyota Camry)
  Credit card minimums: $200/month
  Condo fee: $350/month (covers snow removal and basic maintenance)

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Step 1 – GDS Calculation

• • Monthly mortgage payment at 6.50% qualifying rate: ≈ $4,295

• • Property taxes: ≈ $460/month

• • Heating: $150/month

• • 50% of condo fee: $175/month

Total housing costs: $4,295 + $460 + $150 + $175 = $5,080

GDS = $5,080 ÷ $13,333 × 100 = 38.1% Passes under 39% guideline.

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Step 2 – TDS Calculation

• • Housing costs: $5,080

• • Other debts: $550 (car) + $200 (credit card) = $750

• • Total monthly debts: $5,830

TDS = $5,830 ÷ $13,333 × 100 = 43.7% Passes under 44% guideline.

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Why This Matters for Toronto Buyers

This example shows how high GTA home prices plus the stress test can push borrowers close to the limits — even with a strong income and good credit score (minimum 680+). For those slightly above the limits, some major banks or credit unions may still approve the mortgage if you have excellent overall financial strength.

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Tips to Improve Your Approval Odds

• • Pay down debts before applying — even small monthly payments can tip your TDS over the guideline.

• • Consider a 30-year amortization if you have 20% down — this lowers your qualifying payment.

• • Boost your credit score — prime lenders generally require at least one borrower with 680+.

• • Get pre-approved before shopping so you know your exact budget.

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The Bottom Line

For an $850K condo townhouse purchase with 20% down in Toronto, a household income of $160K and moderate debt levels can meet the GDS and TDS guidelines under 2025 lending rules. If you’re slightly over, don’t lose hope — some lenders will consider exceptions for strong borrowers.

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Ready to find out your exact approval amount?
As a licensed Ontario mortgage agent, I can help you:

• • Calculate your true GDS and TDS ratios

• • Compare fixed and variable rates

• • Explore both prime and alternative lending options

💬 Book your free pre-approval call via WhatsApp and start shopping with confidence.