What Is TDSR and Why It Matters When Applying for Credit in Canada
June 19, 2025
If you're applying for a mortgage, personal loan, or line of credit in Canada, you'll quickly hear one term over and over: TDSR. Short for Total Debt Service Ratio, this metric is one of the key things bankers and lenders look at when deciding whether to approve your credit application.
Let’s break down what TDSR is, how it’s calculated, what benchmarks banks use, and how you can improve it to boost your approval chances.
What Is TDSR?
TDSR stands for Total Debt Service Ratio. It’s the percentage of your gross monthly income that goes toward paying all of your monthly debt obligations, including:
- Mortgage or rent
- Property taxes
- Credit card minimum payments
- Car loans or leases
- Lines of credit
- Student loans
Formula:
TDSR = (Total Monthly Debt Payments / Gross Monthly Income) x 100
Example:
If your gross monthly income is $5,000 and your total debt payments are $1,800:
TDSR = ($1,800 / $5,000) x 100 = 36%
Why Does TDSR Matter?
TDSR helps banks evaluate how leveraged you are and whether you can comfortably handle additional debt.
Most lenders in Canada prefer to see a TDSR of 40% or less. Anything above that signals higher risk, and your chances of approval may drop — especially if your credit score or income stability are borderline.
GDSR vs. TDSR: What’s the Difference?
You might also hear about GDSR (Gross Debt Service Ratio). This metric only looks at your housing-related costs:
- Mortgage or rent
- Property taxes
- Utilities
- 50% of condo fees (if applicable)
While GDSR is mostly used for mortgage approval, TDSR is used more broadly for all kinds of credit.
What’s a Healthy TDSR?
| TDSR Range | Risk Level | Likely Outcome |
|---|---|---|
| 0–28% | Low Risk | Strong chance of approval |
| 29–35% | Moderate Risk | Approval depends on credit history |
| 36–40% | Borderline | Higher scrutiny by lenders |
| 41%+ | High Risk | Likely rejection unless mitigated |
How to Improve Your TDSR
- Pay down existing debts (especially high-interest credit cards)
- Avoid new credit applications before applying for large loans
- Increase your income (consider freelance or side work if applicable)
- Refinance or consolidate loans for lower monthly payments
Final Thoughts
Understanding your TDSR can help you better prepare for any credit application, from a mortgage to a personal line of credit. It’s one of the most important numbers your banker will review.
Want to make sure you’re talking to the right banker for your credit needs? Check out our guide to finding the right banker in Canada — and skip the guesswork next time you visit (or skip) the branch.
If you’ve seen ads like “Get $350 when you open a chequing account” or “Earn $200 cashback with a new savings account,” you’re not alone. Major Canadian banks regularly offer sign-up promotions to attract new customers — but they often come with strings attached. This post breaks down: How to choose the right promotional offer Who to talk to at the bank What documents you need What to look out for in the fine print Step 1: Understand the Types of Promotions Banks in Canada typically offer bonuses for: Opening a new chequing or savings account Setting up direct deposit (e.g., your payroll) Keeping a minimum balance for a set period (usually 90+ days) Signing up for a credit card alongside your new account Common Bonus Examples: RBC : Up to $350 bonus for switching payroll deposit BMO : Up to $400 bonus + additional rewards for referrals Scotiabank : Bonus interest rates on high-interest savings accounts (HISAs) Step 2: Who to Talk to You may be tempted to walk into a branch and speak to the first person at the counter — but skip the teller line. Instead, ask to speak to a financial advisor or account manager . These professionals: Understand the promotion details Can explain conditions and help you qualify May offer bundled deals (e.g., account + credit card) Step 3: What You Need to Bring To open an account, you’ll need: 1 piece of government-issued photo ID (e.g., driver’s license, passport) 1 secondary piece of ID (e.g., SIN card, credit card) Proof of address (utility bill, lease agreement) A recent pay stub if the promo involves direct deposit Step 4: Watch Out for These Conditions: You may need to keep your account open for at least 90 days to receive the bonus Some promos are only for new clients (i.e., people who haven’t banked with them in the last 12 months) Failure to meet minimum deposit or transaction requirements could forfeit your reward Why Use OpenBankr? With so many options out there, it can be hard to know which banker to talk to — and whether you're getting the best deal. OpenBankr helps you: Compare verified banker profiles who specialize in account openings and promotions Submit a private RFP if you want bankers to come to you with their best offer Stay in control of your info until you're ready to engage Final Thoughts Bank promos are real — but so are the hoops you may have to jump through. By knowing what to expect and who to talk to, you can walk in with confidence and walk out with your bonus. For more tips on navigating Canada’s banking system, subscribe to the OpenBankr blog and be the first to hear when we launch.
Navigating the Canadian banking system can feel overwhelming, especially when you're not sure who to talk to at your local branch. Whether you're looking to open a new bank account to take advantage of a promotion, apply for a personal line of credit, or get pre-approved for a mortgage — knowing which type of banker handles what can save you time, reduce frustration, and help you secure the best deal faster. In this post, we'll walk you through: Who to talk to for what service (mortgage, line of credit, account opening) Key financial metrics like TDSR (Total Debt Service Ratio) Tips to save time and avoid unnecessary trips to the bank 1. Who Do You Talk to at the Bank? It Depends on What You Need When you walk into a major Canadian bank like RBC, BMO, TD, Scotiabank , or CIBC , you’ll typically see two main types of banking staff: tellers and advisors/specialists . Understanding their roles is key. For a Personal Line of Credit (LOC): Speak to a Personal Banker or Financial Advisor A personal banker or financial advisor is the right person for services like: Applying for a personal line of credit Credit card limit increases Overdraft protection Unsecured lending needs 💡 Tip : Don’t waste time in the teller line — tellers handle basic transactions like deposits and withdrawals. For credit products, request to speak to a personal banker . For a Mortgage or Home Loan: Speak to a Mortgage Specialist A mortgage specialist focuses exclusively on: New mortgage applications Renewals and refinancing Pre-approvals for home purchases They often work flexible hours and meet offsite — not just in branches — making it easier to schedule an appointment outside your 9-to-5. 💡 Bonus Tip : Many mortgage specialists are commission-based, which means they’re motivated to win your business. This often makes them more flexible and responsive. For a New Bank Account or Promo Offer: Start with a Financial Advisor If you're responding to a promotion for opening a new chequing or savings account, a financial advisor (or "account manager") can: Walk you through account types Explain the fine print behind bank promos (e.g., direct deposit requirements) Set up additional services like e-Transfers, online banking, or credit cards 2. Understanding the Metrics: What Bankers Look At When You Apply Even if you're just looking for a simple line of credit or a credit card, bankers use standard financial ratios to determine your eligibility. ✅ TDSR – Total Debt Service Ratio This is one of the most important formulas used by lenders. TDSR calculates how much of your gross monthly income goes toward debt obligations . These include: Mortgage payments Property taxes Car loans Credit card minimums Other loans or lines of credit Most banks in Canada look for a TDSR of 40% or less . That means no more than 40% of your gross income should go toward your total monthly debt obligations. Example : If you earn $5,000/month and your total debt payments add up to $2,000, your TDSR is 40% – likely the upper limit for approval. ✅ GDSR – Gross Debt Service Ratio This is similar to TDSR but focuses only on housing-related debt (mortgage, property taxes, utilities, etc.). Ideal GDSR is typically 32% or lower . ✅ Credit Score Most banks require a credit score of 660 or above for unsecured products like personal lines of credit. Mortgage approvals may vary depending on the lender and whether you have a co-signer. ✅ Employment and Income Verification You’ll often need to show: Recent pay stubs T4s or NOAs (Notice of Assessment from CRA) Employment letters For self-employed individuals, banks may ask for 2 years of tax returns and bank statements . 3. Save Time and Avoid the Guesswork One of the most frustrating parts of dealing with banks is not knowing who to talk to or what you need to qualify . Too often, clients end up in the wrong line or get bounced between departments. That’s where platforms like OpenBankr aim to make a difference. 💡 With OpenBankr, You Can: Search verified banker profiles based on what you need (e.g., mortgage, personal lending, new account) Filter by institution, region, or specialization Upload a private RFP (Request for Proposal) and let interested bankers come to you Stay anonymous until you choose to share your info with a banker who fits your needs Final Thoughts Whether you’re applying for your first mortgage or just trying to open a new chequing account to score a $350 cash bonus, understanding who to speak to and what they’re looking for makes the process faster and easier. Next time you’re heading to a bank, skip the guesswork — and soon, skip the branch altogether. 📌 Follow OpenBankr for more tips on navigating Canadian banking, personal finance, and connecting with the right financial professionals – directly.
