A calculation used by lenders to determine if a borrower is able to afford making payments on a debt. This metric is typically used in the home loan industry. The equation for determining the gross debt service ratio is: GDS = TMP / GMI x 100. Where:GDS = gross debt service, TMP = total monthly payments, and GMI = total monthly incomeFor example, a borrower might be seeking a home loan with monthly payments of $1000. Assuming the borrower's gross income is $4000 per month, 1000 / 4000 = .25 x 100 = 25%. Lenders often consider a borrower with a gross debt service ratio of over 30% a poor risk.
Related information about gross debt service ratio (GDS):
- Gross Debt Service Ratio (GDS) Definition | Investopedia
A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment about whether a potential borrower is already in too much ...
- Total Debt Service Ratio (TDS) Definition | Investopedia
This ratio is very similar to the gross debt service ratio (GDS) except that the GDS does not account for non-housing related payments. TDS allows for a slightly ...
- Gross Debt Service Ratio - GDS: Definition from Answers.com
Gross Debt Service Ratio - GDS A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment.
- What is gross debt service ratio (GDS)? definition and meaning
Definition of gross debt service ratio (GDS): A calculation used by lenders to determine if a borrower is able to afford making payments on a debt. This metric is ...
- Mortage Debt Services Rations Calculator - Fiscal Agents Financial ...
... Ratios Calculator estimates the Gross Debt Service Ratio and Total Debt Service Ratio that apply when entering a mortgage. Gross Debt Service Ratio ( GDS) ...
- Fiscal Agents Money Centre
Shows the posted gross debt service ratio (GDS) and total debt service ratio ( TDSR) the ratios are a requirement by banks to qualify for a mortgages.
- Gross Debt Service Ratio | RateHub Mortgage Blog
Sep 19, 2012 ... First, your Gross Debt Service Ratio (GDS) is calculated. This is the percentage of your income needed to pay all monthly housing costs: your ...
- Useful Ottawa Real Estate Worksheets
Calculate Your Gross Debt Service Ratio (GDS). "Most lenders say that your monthly housing expenses (principal, Interest, and taxes) should not exceed 30% of ...