Financial Planners advise spending no more than 30% of your income on housing. If you spend more, you could be ‘house rich’ and ‘cash poor’ leaving you with no disposable income for retirement or educational savings.

My GDS Calculator enables you to discover how much of your income is going towards housing. My TDS Calculator enables you to know if you have too great a financial burden as it combines all your debt and your housing costs.

READ MORE: Calculating Debt Service Ratios

Determine how much of your income is going towards housing costs.

The Gross Debt Service ratio (GDS) is a measure used by lenders to determine how much of your household income is going toward housing costs. It includes your mortgage payments, property taxes, heating costs, and (if applicable) 50% of condo fees. By calculating GDS, lenders can see whether your housing expenses are affordable relative to your income. Generally, a GDS of 33% or less is considered prudent. A higher ratio means you may be stretching too much of your income on housing, leaving less room for savings or unexpected expenses.

Determine how much of your income is going towards housing costs and debt obligations.

The Total Debt Service ratio (TDS) goes one step further. It looks at all of your monthly debt obligations—housing costs plus car loans, credit cards, student loans, lines of credit, and other debts. By calculating TDS, lenders get a full picture of your ability to manage all commitments together. A TDS under 44% is the most lenders will usually considered, but a TDS under 35% is more prudent. This ratio helps ensure you can handle your mortgage and still manage the rest of your financial life comfortably.