Scotiabank increases mortgage payment without notice

From what I know Scotiabank is the only big bank which does this while the other banks just extend the amortization, but this is all written in the agreement you signed?

Sephora wrote: ↑ After the BOC rate hike, no surprise that Scotiabank followed suit with their prime rate. But I found it surprising they immediately increased the bi-weekly payment on my variable mortgage without any notice or forewarning.

Perhaps the official letter is in the mail, but still a bit surprising. Good thing I had some float in the account they draw from in case of accidental fees.

Don't abuse your right. Why should they inform you? Who do you think you are?

ilovetoyota wrote: ↑ Don't abuse your right. Why should they inform you? Who do you think you are?

Ultra elegant

I used to have a Scotiabank variable rate mortgage until recently. You will get a letter in the mail later.

ilovetoyota wrote: ↑ Don't abuse your right. Why should they inform you? Who do you think you are?

Scotiabank should hire you to run their CS department.

I received the letter from Scotiabank today.

There are 2 types of variables. One is the payment stays the same until the interest due is more than the payment and then they will adjust the payment. The other is what OP has where as the prime rate changes your payment amount will change also (Adjustable Rate Mortgage ARM). The type of variable and how payments work should be in the disclosure papers that you were given to sign.

kangarooz wrote: ↑ From what I know Scotiabank is the only big bank which does this while the other banks just extend the amortization, but this is all written in the agreement you signed?

Agreed, this should be in your agreement or at least discussed with the advisor prior to you signing off on the mortgage.
The bank wasn't going to wait until you get the letter then raise the payments.

moeymoeymoeymoe wrote: ↑ Ultra elegant

He is trolling, says the same provocative stuff on all threads. Whatever makes the dude happy

It's what you signed up for.

Though to be fair sending the letter so that you receive it after the payment comes out just completely defeats the purpose.

I got an email about it. Well specifically, it was about the BoC raising the interest rate and what it means. It didn't explicitly say what my new rate would be going forward. I agree that they immediately applied the new rate to the next mortgage payment that was shortly after the BoC announcement. I previously had a mortgage with Simplii and they always sent a letter well in advance about the rate change including when it becomes effective.

2 types of variable rates.

VRM (Variable Rate Mortgage) - Big 5 except Scotiabank. Your payment won't increase but your amortization will be increased. Once your payment can't cover your interest, your mortgage payment will be recalculated based on the new rate. This is also called trigger rate.

ARM (Adjustable Rate Mortgage) - Scotiabank, National Bank and most A lenders and B lenders. Your principal is the same amount when you signed your mortgage. Your interest payment will be increased (or decreased if you make a request) if the rate increases/decreases.

No matter which bank or type of rate, every time your payment is changed, you will receive a letter/email.

kangarooz wrote: ↑ Scotiabank should hire you to run their CS department.

C?

You mean B.

kangarooz wrote: ↑ Scotiabank should hire you to run their CS department.

And advise customers who want to bail out from overpaying houses to say scotia cancelled the financing

Sephora wrote: ↑ After the BOC rate hike, no surprise that Scotiabank followed suit with their prime rate. But I found it surprising they immediately increased the bi-weekly payment on my variable mortgage without any notice or forewarning.

Perhaps the official letter is in the mail, but still a bit surprising. Good thing I had some float in the account they draw from in case of accidental fees.

Try reading your Mortgage Agreement.

I locked in 7 years at 1.95% in Feb 2021 ... I'm laughing at all you people on variable rates now .... what a joke!

kangarooz wrote: ↑ From what I know Scotiabank is the only big bank which does this while the other banks just extend the amortization, but this is all written in the agreement you signed?

Does NA also do it? I remember I saw it somewhere

smartie wrote: ↑ Does NA also do it? I remember I saw it somewhere

Yes NA has ARM too.

I wonder what percentage of households are oblivious to what is going on with the interest rates right now and are being taken by surprise when they notice that their mortgage payments are increasing. People who spend their free time reading RE discussion online are definitely not representative of normal population, and many people sign mortgage documents that they don't understand.

I am guessing there are a bunch of people on VRM who don't know about rate increases and that their amortizations have ballooned. Bunch more people will wake up surprised when their payments go up with the next increase in prime hits their trigger rate.