Scotiabank Mortgage Rates & Reviews

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Scotiabank (TSE: BNS) is the third largest bank in Canada in terms of assets and market capitalization, with a market cap of over $90 billion as of September 2024, making Scotiabank one of Canada’s Big 6 Banks. Incorporated in 1832, Scotiabank has established itself as Canada's most international bank, with operations in Latin America, the Caribbean, Central America, Europe and Asia-Pacific. Scotiabank offers a diversified portfolio of financial services to customers with four distinct business lines: Canadian Banking, which makes up 41% of the company's earnings, International banking which makes up 26%, Global Banking and Markets, making up 18%, and Global Wealth Management, which makes up 15%. In total, Scotiabank has 2,200 branches and offices worldwide. This allows Scotiabank to have over 89,000 employees in over 15 countries while serving 25 million customers globally.

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As of Q3, 2024, 70% of Scotiabank’s mortgage portfolio was made of fixed-rate mortgages. A Scotiabank fixed-rate mortgage reduces the risk of any future interest rate changes by letting you keep your interest rate and payments the same over the mortgage term. This can give you peace of mind, especially if you are a new homeowner or have a large mortgage amount, which is why it's very common for buyers to get fixed-rate mortgages. If you are arranging a mortgage for a future or current home, you can lock in a fixed interest rate with Scotiabank for 120 days. If interest rates go up during that time, you will still be guaranteed a lower rate.

Scotiabank has two kinds of variable-rate mortgages – with fixed mortgage payments and with variable mortgage payments. However, in both cases, the interest rate will fluctuate with the prime rate. In the case of fixed payments, more of your mortgage payments will go towards paying the principal when mortgage rates decline. Meanwhile, in the case of variable payments, the mortgage payments will decrease with a decline in mortgage rates. Either way, a variable-rate mortgage is a good option if you expect interest rates to fall; however, the stability that a fixed-rate mortgage offers may be your best option if you are risk-averse.

Scotiabank offers an open variable rate mortgage option – Scotia Flex Value Mortgage - 5 Year Open Term – that can be converted to any fixed rate mortgage at any time without any prepayment charges. This type of mortgage allows you to have a variable interest rate while having the option to convert to a fixed mortgage rate in the future. Meanwhile, their variable rate closed mortgages can be renewed early to a closed fixed rate mortgage.

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Scotiabank’s History

Inception - 1910

The Bank of Nova Scotia was started in 1832 in Halifax, Nova Scotia by a group of merchants and citizens that wanted to have a public bank. Upon its inception, Scotiabank was operating in challenging times, however continued to survive and grow its business slowly until it merged with The Union Bank of Prince Edward Island, which allowed it to to expand its operations across Canada and abroad.

1910 - 1980

By 1910, Scotiabank was the sixth-largest bank in Canada. It merged with multiple banks over the next decade and went from 97 branches in 1910 to 306 branches in 1923.

1980 - Today

In the late 1980s and early 1990s, Scotiabank was back acquiring more financial institutions, including Mccloud Young Weir Limited in 1988, Montreal Trust in 1994, and The National Trust Company of Toronto in 1997. During the 2000s, Scotiabank continued to acquire financial institutions, however this time the bank focused on growing its wealth management business and acquiring banks abroad. To grow wealth management, Scotia bought ETrade Canada in 2008, Dundee Wealth in 2011, Jarislowsky Fraser in 2018, and MD Financial Management in 2018 as well. To grow its presence abroad, Scotia bought Censosud in Chile in 2015, The Discount Bank in Uruguay in 2016, BBVA in Chile in 2018, and CitiBank Columbia in 2018.

If you are self-employed or working in a commission based occupation, Scotiabank self-employed mortgages can help you purchase a home. You will need a minimum downpayment of 10% of the purchase price to be able to qualify for a self-employed mortgage with mortgage insurance. If you do not qualify for mortgage insurance, you will need at least 20% down. In order to get a self-employed mortgage, you will also need to have a good credit score, sufficient income, and to pass a mortgage stress test.

Major Bank Offerings

All 6 major banks in Canada offer mortgages to self-employed individuals, with the following requirements and minimum down payments:

If you or a family member plan on occupying the property as a principal residence, you may be able to put down as little as 5% of the purchase price for a high-ratio mortgage. If not, at least a 20% down payment will be needed because you will be ineligible for mortgage insurance. If you already own a home and have built up some equity in it, you may be able to use the equity to finance the downpayment.

Tax Considerations When Buying a Vacation Home

If your vacation home isn't your primary residence, you will be charged capital gains taxes if you decide to sell the property and the sale price is higher than your adjusted cost basis. Your adjusted cost basis is your purchase price plus the cost of any renovations you have done on the property.

If you rent the property when you aren’t using it, your rental income will be an important consideration when it comes to taxes. You can subtract any costs of renting the property out from the income you make. This means you will be able to deduct the expenses related to the property for when you aren't using it, along with depreciation (where applicable) to drastically reduce the taxes you would pay on your rental income from the property.

If you plan on occupying part of the investment property, you may only need as little as 5% down because you will be eligible for mortgage insurance. If not, you will need at least a 20% downpayment. If you already have a Scotia Total Equity Plan (STEP) tied to your current home’s equity, you can leverage it to purchase an investment property. STEP allows you to get a line of credit against your home equity which can be used to pay the downpayment for your investment property.

To qualify for a mortgage loan for an investment property, you will need:

• A good credit score,
• Downpayment of at least 20% if you don't occupy the property,
• Sufficient income from employment or other sources to cover monthly payments, and
• Market rent estimates or current lease agreements

What To Consider When Purchasing An Investment Property?

Three major factors that you should consider when determining if a rental property is the right investment for you are:

The Price: When you are trying to determine if what you are paying is a fair price or not, using comparable sales nearby and a calculation called a capitalization rate (Cap rate) can help you make a more informed decision. A property’s cap rate is the ratio of its net operating income to its purchase price or current asset value. Usually, the higher the cap rate, the better the returns that can be made when renting it out. However, buying a property with a high cap rate may be more risky, as a higher cap rate is usually because the property's location or condition might not be desirable. However, a property with too low of a cap rate may make it hard to generate worthwhile returns from renting it out, especially with the risk and time commitment involved in an investment property.

Expenses: Common expenses you can expect to cover as a landlord include:

• Home insurance,
• Property taxes,
• Repair and maintenance costs,
• Day-to-day operating expenses and costs to rent it out

Location: When you are looking for the right location to purchase a property in, it's important to pick a city and location that is growing, has a stable economy, and has a low crime rate. All of these factors will influence your ability to not only rent out the property, but also will help the property appreciate in value. If you pick an area that is not very desirable, it may also become hard to rent the property out and you may not be able to raise your rental rate over time because there isn't much demand to live in the area.

Tax Implications of an Investment Property

If you are planning on purchasing an investment property that you will not live in, if and when you go to sell the property you will incur a capital gains tax if you sell it for a profit. Estimating if you are selling a property at a profit involves calculating your adjusted cost basis by adding your total purchase price along with any renovations done on the home over time and subtracting this amount from your sale price after the cost of selling the home.

Another important tax implication for a rental property is how rental income is calculated. When you own an investment property, you are able to reduce your taxable income with operating expenses, interest costs and depreciation associated with the property. This means that it's likely you will pay a low tax rate.

With the Scotia Total Equity Plan (STEP), you are able to borrow against the home equity that you have built up in your home. You can borrow up to 80% of your home’s equity with STEP, and you need to have at least 20% equity in the home to qualify for the plan. As you continue to pay down your mortgage, you build more equity in your home over time, and thus, your credit limit for the plan will automatically increase. STEP allows you to save money on interest payments by letting you consolidate multiple credit products under the plan. Since it is backed by the value of your home, the interest rate you will pay will be much lower than other credit products like a personal loan or credit card.

STEP is very simple and works in 3 steps:

1. When you are in the process of getting a Scotiabank mortgage, you sign up for STEP. In order to be eligible for the plan, you will need to meet Scotia’s credit criteria for residential mortgages.
2. After signing up for and being accepted for STEP eligibility, you can select which products you want to link with STEP. This can include a mortgage, personal line of credit, credit cards, Scotia plan loans, overdraft protection and more.
3. As you continue to make your monthly mortgage payments and continue to build more equity in your home, the amount of credit you will be eligible for with the STEP program will also increase, allowing you the flexibility to meet your financial needs and goals.

With a low interest rate that is much lower than other credit products such as a credit card, STEP will give you more flexibility in where and how you spend your money. Potential uses for STEP include:

• Renovating your home,
• Consolidating your debts,
• Education costs,
• For investments, and
• To have available credit in case of an emergency

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Scotiabank posted rates are the official rates used when calculating your mortgage break penalty, which is the fee you will pay if you want to break your mortgage early or refinance it before the term expires.

Similar to RBC, TD, BMO, and National Bank, Scotiabank will calculate your penalty based on a method called the interest rate differential (IRD) and apply this penalty if it is larger than 3 months worth of interest payments. Scotiabank will compare the interest rate on your mortgage to the posted rate for a term length similar to the time remaining on your mortgage term. To calculate the mortgage break penalty, they multiply the difference between the interest rate on your mortgage and the posted rate by your mortgage amount, then multiply that by the term length remaining on your mortgage.

Bank or Lender	Variable Rate Mortgage	Fixed Rate Mortgage
	3 Months’ Interest	Greater of 3 Months’ Interest or the IRD amount

Scotiabank Prepayment Calculator

Scotiabank Prepayment Calculator

Are you looking to pay off your mortgage early? Or refinance the terms of your mortgage at a lower interest rate? Maybe you sold your home and purchasing a new home, in which a mortgage transfer will apply. Whatever the case, you most likely will have to pay a mortgage break penalty set by your lender. Whatever the situation, our Scotiabank prepayment charge calculator will help you determine the cost to break your mortgage so you can be confident about your mortgage decisions.

Inputs

What is the remaining balance on your mortgage?

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What is the term-length and type of your current mortgage?

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What is your current mortgage interest rate?

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If applicable, what was the rate discount you received when you signed your current mortgage agreement?

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The day you signed your mortgage, your lender may have provided you with a discount. You may be paying 3.25% but the posted rate on that day was 3.75%, a discount of 0.5%. If you are unaware of any discount, you can skip this step.

When did your current mortgage start?

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Who is your current mortgage lender?

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What is Scotiabank's current interest rate for a 1-year fixed rate mortgage?

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What would you like to do?

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This is an add-on feature to your monthly Scotiabank mortgage payments that will give you peace of mind with your mortgage being covered if there are unfortunate events like critical illness, disability, or death. These forms of mortgage protection insurance will be offered to you when you complete your home purchase and receive your mortgage, and your payments will not increase over the time you have coverage. Coverages will be offered to you for your first 30 days risk-free, meaning that if you do decide to cancel your mortgage protection insurance coverage, you will receive your money back. the following monthly rates apply for a $500k mortgage:

Note: Premium rates are current as of September 2024, calculated using Scotiabanks mortgage insurance calculator.

Considering that there is no health check and only a few verbal health questions before you're accepted, mortgage protection insurance can also be a good way for someone not eligible for individual life insurance to get some form of coverage.

This feature lets you pay up to double your normal monthly mortgage payment each month. If you do decide to pay more of your mortgage each month, the extra payment will go solely to reducing your mortgage principal, meaning you will pay less interest over your term and pay down your mortgage much quicker.

Scotia’s Match-A-Payment is a very helpful tool, however all 6 Canadian banks offer similar options to help pay down your mortgage quicker:

This feature will help you manage any sudden interruption to your life or your finances by allowing you to miss a mortgage payment if you have doubled a payment at least once in your term. Although using Scotiabank’s Miss-A-Payment feature will result in your mortgage being paid down slower and more interest being charged over your term, it can give you valuable time to recover from an unforeseen event, such as a job loss.

Although Miss-A-Payment will allow you to miss a mortgage principal and interest payment, it won't mean you don't have monthly payments to make. If you have mortgage protection insurance or pay your property tax through Scotiabank, you will still need to pay these monthly commitments.

Scotiabank’s Annual Mortgage Prepayment Privileges: For closed mortgages where you are not able to pay off or refinance your mortgage in full without paying a break penalty, Scotiabank offers annual mortgage prepayment privileges. These privileges allow you to pay 15% of your mortgage principal off per year without a penalty on most mortgages, helping you to become mortgage-free much faster.

All 6 big banks in Canada offer different mortgage prepayment terms:

Note: Limits are for closed mortgages and are current as of September 2024. Your actual limit may vary depending on your mortgage agreement.

Depending on your mortgage agreement and if Scotiabank wants you to pay municipal property taxes through them, you may need to pay your property taxes in monthly installments along with your mortgage payments. Even if you are not required to pay this way, Scotiabank will let you still pay your property taxes through them if you choose to.

Multiple factors go into Scotiabank’s decision to have you pay property taxes through them instead of directly to your municipality. These include:

1. If you are a first time home buyer,
2. Your credit history,
3. Your mortgage terms, and
4. How large of a downpayment you are making

Depending on these factors, Scotiabank may be less comfortable with you paying the property taxes yourself. The reason the bank cares so much is because if you fail to pay your property tax amount, the municipality has the ability to put a lien on your property. This lien takes priority over the money you owe the bank, meaning that the bank would need to pay off the lien before getting possession of the house if you were to default on your mortgage.

When you sign up for your mortgage and fill out the agreement between you and Scotiabank, they will include if you need to pay through them. If you are required to pay through them, your monthly payments will be estimated based on the information that you receive from your municipality and give to Scotiabank.

If you do not have to pay through Scotiabank, the bank may ask you to present proof of payment within 30 days after the due date. Scotiabank may also check with the municipality to see if you have paid your taxes in full and on time.

Best 5-Year Fixed Mortgage Rates in Canada

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When you are ready to get a mortgage, it is a good idea to have the the documents below prepared for your meeting. Your Scotia mortgage representative will also ensure you have homeowners insurance.

If you are looking at purchasing a home and you need a mortgage, getting pre-approved before you start your home search can help you monumentally. A mortgage pre-approval is when you fill out an application with your lender, and that lender then provides you with a commitment to providing you a mortgage. During this process you will learn how much the bank is willing to lend to you and what the terms of the mortgage will be. Although a pre-approval is a commitment to provide the funds offered, you will still need to go through a final approval process before you will get the mortgage loan.

Some of the information you will need to complete your mortgage pre-approval application include:

• Government identification,
• Proof of income,
• Proof of downpayment,
• The length of time you have been with your current employer, and
• Proof of assets and information on debts

With the process of getting a mortgage pre-approval not costing you money and being quick especially when done online, there is limited downside to getting one. The benefits of getting a pre-approval however are:

1. You will know more about your mortgage terms and how much you qualify for,
2. This information can help you plan for your monthly payments,
3. You are able to lock-in an interest rate for up to 130 days, and
4. You will be able to make offers on homes without having a condition related to obtaining financing, making your offer more attractive

Considering that the information that you will learn during your pre-approval process will be crucial in your home buying process, getting pre-approved before you start seriously searching is usually your best course of action. If you decide to wait until you find a house that you want to put an offer in before getting pre-approved, your offer will not look as appealing to sellers because you may need to put in a financing condition.

Scotiabank offers you the opportunity to get a mortgage pre-approval either online or in-person at your local Scotiabank branch. Both ways of getting pre-approved have their pros and cons to be aware of. Doing your pre-approval application in-person will allow you to discuss your options with a knowledgeable representative, which can help you feel more confident about the home buying process as the representative answers your questions and gives you added reassurance. An online pre-approval gives you the benefit of being able to fill out the application from the comfort of your home, while the pre-approval process is also much faster. Online pre-approvals can be processed in minutes, while in-person applications may take a few days to process.

Scotiabank offers you the convenience of getting a mortgage in a branch, over the phone, and online. The phone number to call to speak with a Scotiabank mortgage representative is 1-877-303-8879. To find a location to visit in order to meet with a representative, the Scotiabank branch locator will guide you to a location in your area, and will also provide you with directions. As you search for a branch to visit, you are also able to see the hours of operations and the languages available at the branch, so that you can find the right branch to book an appointment at. Scotiabank’s institution number is 002.

Best 5-Year Fixed Mortgage Rates in Canada

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As a way to get a better understanding of what the experience of banking at and getting a mortgage with Scotiabank would be like, we analyzed user reviews from InsurEYE:

InsurEYE: 3.4/5 from 54 reviews

Along with all the other big 6 banks in Canada, you are no longer able to make a mortgage deferral request with Scotiabank. If you are in a position where you are experiencing financial difficulties, talking with a Scotiabank representative about your options may be helpful.