Debt service measure used by the financial lenders for preliminary assessment of earlier debts of a potential borrower is called as Gross Debt Service ratio. If the ratio is below 30%, that borrower comes with an acceptable level of debt. Gross Debt Service Ratio (GDSR) calculator calculates the ratio based on the principal & interest, property taxes, heating costs and Gross monthly income.
Calculate the Gross Debt Service Ratio (GDSR) for the principal of interest of $5000, property taxes of $500, heating cost of $1000 and gross monthly income of $30000.
Gross Debt Service Ratio (GDSR) = [ ( 5000 + 500 + 1000 ) / 30000 ] x 100
= 21.67 % .