Auto Limit increase for Smith Manoeuvre with BNS STEP

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Mar 12th, 2022 8:17 am

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Mar 10th, 2022 11:35 pm

McMannis [OP]: Newbie; Feb 24, 2016; 6 posts

Mar 10th, 2022 11:35 pm

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

Mar 11th, 2022 8:07 am

cloak: Deal Addict; Sep 2, 2009; 2722 posts; 2718 upvotes; Ottawa

Mar 11th, 2022 8:07 am

Can't answer re. Scotia but: did it stop before or after the interest rate increase? (That can also affect calculations)

Mar 11th, 2022 8:14 am

McMannis [OP]: Newbie; Feb 24, 2016; 6 posts

Mar 11th, 2022 8:14 am

Yea stopped back in October

Mar 11th, 2022 9:26 am

ant1029: Jr. Member; Jul 23, 2008; 108 posts; 26 upvotes

Mar 11th, 2022 9:26 am

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)

Mar 11th, 2022 9:44 am

McMannis [OP]: Newbie; Feb 24, 2016; 6 posts

Mar 11th, 2022 9:44 am

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%.
?

Mar 11th, 2022 10:49 am

Wilmega: Deal Addict; May 28, 2005; 2427 posts; 380 upvotes; GTA

Mar 11th, 2022 10:49 am

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.

...

Mar 11th, 2022 11:04 am

McMannis [OP]: Newbie; Feb 24, 2016; 6 posts

Mar 11th, 2022 11:04 am

Did they say why it stopped increasing?

Mar 11th, 2022 3:18 pm

windywalks: Member; Oct 18, 2012; 225 posts; 27 upvotes; GTA

Mar 11th, 2022 3:18 pm

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 ?

Mar 11th, 2022 5:12 pm

smartie: Deal Guru; Dec 5, 2006; 14212 posts; 9592 upvotes; Markham

Mar 11th, 2022 5:12 pm

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

Mar 11th, 2022 8:05 pm

dongta: Member; Feb 24, 2018; 217 posts; 78 upvotes; Toronto

Mar 11th, 2022 8:05 pm

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.

Mar 11th, 2022 8:27 pm

smartie: Deal Guru; Dec 5, 2006; 14212 posts; 9592 upvotes; Markham

Mar 11th, 2022 8:27 pm

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

+1

Mar 12th, 2022 8:17 am

reversi: Sr. Member; Dec 26, 2019; 815 posts; 1388 upvotes

Mar 12th, 2022 8:17 am

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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