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Company Loan Type APR Est. Pmt.

total debt service

Posted on: 21st Dec, 2006 04:07 pm
anyone can give some information on total debt service ratio?how it is calculated?
Hi David,

Welcome to Mortgagefit forum.

This ratio is used by lenders for assessing whether any borrower's current debt burden is high or not.

This ratio shows the proportionate comparison of expenditure on housing related & similar payments to a person's gross income.

Let us know if you have any other questions.

Posted on: 21st Dec, 2006 04:17 pm
Hi David,

Let me give your some more details about Total Debt Service ratio.

If the ratio comes to less than 40% then it means the borrower's level of debt is within acceptable limits.

Ratio is calculated as:

Annual Mortgage Payments + Other Debt Payments + Property Taxes

______________Gross Family Income

Hope your own calculation comes to be under 40% as per the formula. :)

Posted on: 21st Dec, 2006 04:34 pm
I think they are reciprocals. Debt to incomer raio is the ratio of total debt and total income. But Gross debt service ratio is the ratio of income to total debt.
Posted on: 23rd Dec, 2006 12:48 am
Hi David,

Both ratios are the same. The terms are different for USA and Canada. In USA its the debt to income ratio while in Canada the same ratio is known as Gross Debt Service Ratio.


Posted on: 23rd Dec, 2006 01:30 am
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