What is a TDSR (Total Debt Service Ratio)?
Is the calculation used by financial Institutions to determine whether a person can afford a loan based on their income and current debt obligations.
TDSR is a debt service measure that lenders use as a rule of thumb to give a preliminary assessment of whether a potential borrower is already in too much debt. More specifically, this ratio shows the proportion of gross income that is already spent on housing-related and other similar payments.
Receiving a ratio of less than 40% means that the potential borrower has an acceptable level of debt.
Have a question that’s not here? Call us and we’ll be happy to answer it for you.