GDS (Gross Debt Service Ratio)

Real Estate

A ratio Canadian banks use to qualify you for a mortgage. Your housing costs (mortgage, property tax, heating) divided by your gross income. Banks want this under 32%. If you make $6,000 per month gross and housing costs are $1,800, your GDS is 30% and you would likely qualify.

Related Terms

Mortgage

A loan to buy a house where the house itself is the collateral. You typically pay it back over 25 years with interest. If you stop paying, the bank can take the house.

Mortgage Principal

The portion of your mortgage payment that actually pays down the loan amount (not interest). Early in your mortgage, most of your payment goes to interest. Later on, more goes to principal. Paying down principal builds equity in your home.

Home Equity

The portion of your home that you actually own. Calculated as home value minus what you still owe on the mortgage. If your house is worth $500,000 and you owe $300,000, you have $200,000 in equity.