Personal Finance

Auto Limit increase for Smith Manoeuvre with BNS STEP

  • Last Updated:
  • Mar 12th, 2022 8:17 am
[OP]
Newbie
Feb 24, 2016
6 posts

Auto Limit increase for Smith Manoeuvre with BNS STEP

Hello,

I had been successfully implementing the SM for several months until one day the LOC stopped increasing with monthly mortgage payments. Someone at the bank suggested because I was maxing out the LOC it was affecting my credit rating for my LOC, and that I needed to keep the drawn amount just slightly below the limit, wait for two months for their systems to cycle through and register below max credit limit, and then auto limit increases would resume. They have not. Has anyone else experienced something similar? If so how did you fix/workaround it?

Thanks!
Last edited by McMannis on Mar 11th, 2022 8:14 am, edited 1 time in total.
11 replies
Deal Addict
Sep 2, 2009
2156 posts
2153 upvotes
Ottawa
Can't answer re. Scotia but: did it stop before or after the interest rate increase? (That can also affect calculations)
Jr. Member
Jul 23, 2008
104 posts
26 upvotes
Has your LOC credit limit approached ~80% of your global limit?

a HELOC can only be up to 65% of the value of your property at the time you had it set up. This would work out to approx. 81.25% of your Scotia STEP global limit (assuming it was set up to 80% LTV at the time of initial setup)
[OP]
Newbie
Feb 24, 2016
6 posts
I believe you always stay within global limit as you pay down the mortgage , ltv reduces, then the paid down amount becomes available on loc, bringing you back up to your 65%.
?
Deal Addict
May 28, 2005
2400 posts
346 upvotes
I had to go into the Branch in January to increase my limit. The Scotia rep said auto increase stopped and my limit hasn't auto increased since.
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Member
Oct 18, 2012
216 posts
23 upvotes
GTA
It may be an irrelevant question on this forum but I will be applying for a BNS HELOC or a 2nd mortgage under STEP. Is there a way to get away with fee like appraisal or legal fees ? Did I read somewhere about cashbacks offered by branch ?
Deal Guru
Dec 5, 2006
11824 posts
6885 upvotes
Markham
McMannis wrote: Did they say why it stopped increasing?
Did you get limit increases after you pay more mortgage?

I have a Scotiabank STEP and they only increase when I go to branch to ask. I think it's because they need my signature for consent. But I heard later you can get auto increases
Jr. Member
Feb 24, 2018
157 posts
50 upvotes
Toronto
smartie wrote: Did you get limit increases after you pay more mortgage?

I have a Scotiabank STEP and they only increase when I go to branch to ask. I think it's because they need my signature for consent. But I heard later you can get auto increases
That's may not be true.. I made a lump sum of 20k into my mortgage the first year... At that time it's not automatic increase credit in the HELOC.. So I asked them to increase manually.. the send me a doc to sign digitally ... I did not have to go to the branch.
Deal Guru
Dec 5, 2006
11824 posts
6885 upvotes
Markham
dongta wrote: That's may not be true.. I made a lump sum of 20k into my mortgage the first year... At that time it's not automatic increase credit in the HELOC.. So I asked them to increase manually.. the send me a doc to sign digitally ... I did not have to go to the branch.
Yes, after covid, they might change the process. Just meant to say in my case, each time I want to increase limit, they need my consent and it is can be done in branch at pre-covid time
Sr. Member
Dec 26, 2019
597 posts
893 upvotes
There have been many complaints of RFD about STEP not auto increasing the credit limit, even when it has supposedly set up to do so. Seems to be hit or miss.

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