Ace the Canada Mortgage Pros Exam 2026 – Unlock Your Property Power!

The maximum Total Debt Servicing Ratio (TDSR) allowable is 44% for conventional mortgages, with some flexibility to go up to 45% under certain conditions. This measure assesses the proportion of a borrower's gross income that goes toward housing-related costs and other debts. A TDSR cap of 40% helps ensure that borrowers are not over-leveraged, mitigating the risk of default and ensuring they can manage their debt obligations comfortably.

Selecting 40% as the TDSR limit is a common guideline among many lenders as it represents a balance between accommodating borrowers and maintaining financial prudence for both the lender and the borrower. Understanding the concept of TDSR is crucial for those in the mortgage industry as it aids in qualifying clients and ensuring responsible lending practices are upheld.