Changes to the Scotia Total Equity® Plan (STEP)
Global Limit

The STEP is a flexible borrowing plan tied to the equity in your home, providing access to available credit. You can set up a unique combination of Scotiabank credit solutions (such as lines of credit or mortgages) under your STEP to fit your needs. 

The STEP Global Limit is the overall borrowing limit that is available to you. 

Effective November 1, 2023, all STEPs opened or refinanced on or after September 15, 2012, with a STEP Global Limit greater than 65% of the home’s value at the time of approval, will have the STEP Global Limit gradually reduced to 65% over 25 years. This will be done through equal monthly reductions to the STEP Global Limit during that period.

STEPs that were opened or last refinanced before September 15, 2012 are not affected by these changes even if they have a STEP Global Limit greater than 65% of the home’s value at the time of approval. However, if at any point, these STEPs are refinanced to a STEP Global Limit greater than 65% of the home’s value at the time of refinancing, the new STEP Global Limit will be subject to the changes noted above.

The total reduction to the STEP Global Limit is the difference between the approved STEP Global Limit and 65% of the home’s value at the time of approval. To achieve this required reduction, the STEP Global Limit will decline by equal monthly reductions spread evenly across 25 years (or 300 months). 

The monthly reduction amount can be calculated by dividing the total reduction by 300.  This amount will be subtracted from the STEP Global Limit once a month for 25 years until 65% of the home’s value is reached. 

Example of how the STEP Global Limit’s monthly reduction amount is calculated: 

Situation:

An impacted customer has a STEP with a STEP Global Limit of $480,000 and their home was valued at $600,000 at the time of their approval. This means that their STEP Global Limit is currently at 80% of the home’s value. Beginning November 2023, that STEP Global Limit will be gradually reduced to 65% of the home’s value ($390,000) over the next 25 years.

How is this calculated:

Current STEP Global Limit ($480,000) – STEP Global Limit at 65% ($390,000) = Total Reduction ($90,000)

Total Reduction ($90,000) / 300 months = Monthly Reduction Amount ($300)

STEP Global Limit Reduction Over 25 Years:

These changes impact the STEP Global Limit only and will limit the availability of additional credit under your STEP in the future. 

The existing credit limits associated with any line(s) of credit and/or credit card(s) that you already have under your STEP will not be affected by these changes. Similarly, mortgage payments and any payments for existing line(s) of credit and/or credit card(s) under your STEP will also remain unchanged. 

If the STEP Global Limit drops below the combined total of any credit limits and mortgage balances of existing accounts that you have under your STEP (the “combined total account limits”), the only impact is that there would be no additional credit available to access while the combined total account limits remain above the STEP Global Limit. There are no penalties associated with having combined total account limits above the STEP Global Limit.

For example, if the combined total for your line of credit ($100,000 credit limit), mortgage ($590,000 balance) and credit card ($10,000 credit limit) equals $700,000 and your STEP Global Limit drops down to $698,000 due to the monthly reductions, there is no penalty.  

You will still have the option to borrow up to 80% of your home’s value: you simply need to apply and be approved for refinancing¹ (which will include a re-assessment of your home’s value). However, if you do refinance to a STEP Global Limit greater than 65% of your home’s value at the time of refinancing, that new STEP Global Limit will be subject to the gradual monthly reduction to 65% over a 25-year period.

These changes to the availability of credit under the STEP are being made in the interest of supporting customers in managing their household debt, and to align with regulatory requirements.

You will continue to gradually accumulate additional credit as you pay down any mortgage components under your STEP as long as the STEP Global Limit has not dropped below the combined total account limits for all existing accounts under your STEP. If you do have additional credit available, you can utilize it to increase the credit limit on an existing line of credit or to add a new mortgage or line of credit under your STEP.

You can access your available additional credit as needed through STEP-eligible Scotiabank credit products such as a line of credit or mortgage.² This can be done from the comfort of your home through Scotia OnLine at scotiaonline.scotiabank.com or the Scotiabank Mobile App, over the phone with our Contact Centre at 1-866-267-9806, or in person by booking an appointment with an Advisor at Scotiabank.com/book. 

For the ultimate convenience, the STEP Automatic Limit Increase (STEP ALI) feature can be set up to automatically increase the credit limit on a selected line of credit as you pay down the principal of your mortgage.³ To set up STEP ALI with an Advisor, phone an Advisor at our Contact Centre at 1-866-267-9806, or book an appointment with an Advisor at Scotiabank.com/book.