Scotiabank
      Back to home
      1. Mortgage Planning Playbook by Matt Parker Morgage Team
      2. Lenders
      3. Scotiabank

      Understanding the Scotiabank STEP: Scotia Total Equity Plan

      The Scotiabank STEP (Scotia Total Equity Plan) is a flexible borrowing solution designed to help homeowners make the most of the equity in their property. It combines the benefits of a mortgage and a line of credit into one integrated plan, providing greater control and flexibility over how you access and manage your funds.

      How the Scotiabank STEP Works

      The STEP allows you to consolidate your borrowing under one umbrella. Here’s how it operates:

      1. Home Equity as a Foundation: The amount of credit available to you is based on a percentage of your home’s appraised value, minus any existing mortgage balance.

      2. Multiple Products in One Plan: With STEP, you can combine various Scotiabank credit products, such as:

        • Fixed-rate and variable-rate mortgages

        • Revolving credit lines (Home Equity Line of Credit, or HELOC)

        • Other Scotiabank lending products

      3. Borrowing Limits: As you pay down your mortgage, your borrowing limit may increase, giving you ongoing access to additional funds without needing to reapply.

      4. Customizable Solutions: You can tailor the STEP to suit your needs. For example, you might choose to use a portion for a fixed-rate mortgage and another portion for a HELOC to manage home renovations, investments, or other expenses.

      Key Benefits of the Scotiabank STEP

      1. Flexibility: With the STEP, you can adjust your borrowing strategy as your financial needs change. For example, you can convert from a variable-rate to a fixed-rate product or access available credit for large expenses.

      2. Cost Efficiency: By combining multiple credit products under one plan, you can potentially save on interest and fees. The HELOC portion, for instance, typically offers lower interest rates than unsecured credit options.

      3. Convenience: Manage all your borrowing under one umbrella, simplifying your financial management.

      4. Credit Access: As you pay down your mortgage or as your property value increases, your access to credit grows without needing to reapply.

      How to Use the STEP

      • Home Renovations: Finance updates or expansions to your property using the HELOC.

      • Debt Consolidation: Combine high-interest debts into your STEP for potentially lower interest rates.

      • Investments or Major Purchases: Use the equity in your home to invest in opportunities or cover significant expenses.

      • Emergency Funds: Establish a revolving credit line for unexpected costs.

      Eligibility for the Scotiabank STEP

      To qualify for the STEP, you must:

      • Own a property or plan to purchase one.

      • Meet Scotiabank’s credit and income requirements.

      • Have sufficient equity in your home (usually up to 80% of the property’s appraised value).

      Considerations Before Applying

      1. Discipline Required: The STEP provides easy access to credit, but it’s essential to use it responsibly to avoid over-borrowing.

      2. Costs and Fees: While the HELOC portion often has lower interest rates, there may be fees associated with appraisals, legal services, or account management.

      3. Variable Interest Rates: The HELOC portion has a variable rate, meaning your payments could fluctuate if interest rates change.

      4. Long-Term Planning: Ensure that the STEP aligns with your financial goals, whether it’s paying down debt, building wealth, or funding large expenses.

      How to Apply for the Scotiabank STEP

      1. Assess Your Needs: Determine how you intend to use the STEP and what combination of products suits your financial situation.

      2. Meet with Us: We can review your financial profile, explain your options, and guide you through the application process.

      3. Appraisal and Approval: We will arrange for an appraisal of your property to determine its current value and calculate the equity available for the STEP.

      4. Legal Documentation: Complete the necessary legal documents to set up the STEP and register it against your property.

      Conclusion

      The Scotiabank STEP is an excellent tool for homeowners looking to unlock the potential of their home equity. Its flexibility, convenience, and cost-efficiency make it a popular choice for those seeking to manage their finances strategically. However, as with any financial product, it’s essential to understand the terms, assess your needs, and plan for the future to make the most of what the STEP has to offer.

      For personalized advice on whether the Scotiabank STEP is right for you, meet with us today to explore your options and take the next step in your financial journey.