total debt service ratio
The ratio of all your debt payments divided by your annual gross income.
Lenders prefer that this ratio does not exceed 40%, and will generally not grant a mortgage loan that would result in a limit beyond 40%.
One wrinkle in the calculation is the way the lender calculates your credit card debts. Even if you have no balance on a card, the lender will calculate the minimum payment you would need to make if the card were maxed out, and include that payment in the ratio.
Therefore, when applying for a mortgage loan, you may want to cancel any unused cards to give yourself more room below the 40% limit.
Contrast with debt service ratio, which (confusingly) is another ratio used to calculate your maximum mortgage loan amount.