Scotiabank Mortgage Review 2023

Scotiabank mortgage at a glance

Scotiabank is one of Canada’s largest mortgage lenders. As a federally-regulated financial institution, it abides by Canada’s strict mortgage qualification guidelines, but it also serves recent arrivals to Canada and the self-employed, groups who may struggle to find mortgages at A lenders.

Scotiabank mortgage full review

Founded in 1832, the Bank of Nova Scotia (Scotiabank) is one of Canada’s oldest and most recognizable financial institutions. What started as Halifax’s first public bank has grown into an international banking heavyweight with locations across the Americas, the U.K. and Asia.  

Scotiabank is among the largest of Canada’s Big Six banks and a major player in the country’s mortgage market. In the third quarter of 2023, Scotiabank’s Canadian mortgage portfolio was $294 billion. 

Overall, Scotiabank offers a mix of mortgage products that’s similar to its Big Six competitors. Fixed, variable and convertible mortgages are all on the menu, as are open and closed options. Scotiabank also provides mortgages to some recent arrivals to Canada and self-employed borrowers.

For homeowners who may need access to further capital while paying off their mortgages, Scotiabank offers the Scotia Total Equity Plan, a HELOC product that allows borrowers access to up to 80% of their home’s value.

Scotiabank mortgage feature overview

Mortgage variety

Scotiabank’s mortgage offerings are generally in line with those available at other traditional Canadian lenders.

The bank’s largest sub-set of products are its closed, fixed-rate mortgages, which have terms of one to 10 years. Scotiabank also has open and closed five-year variable-rate mortgages, as well as a closed three-year variable-rate mortgage. 

Borrowers looking for short-term lending solutions have a few options at Scotiabank: six-month and one-year open fixed-rate mortgages, and a closed convertible product.

Ease of application

Through its eHome mortgage hub, Scotiabank attempts to offer a fully digital mortgage experience that doesn’t require visits to an actual branch. Barring any hiccups, you should be able to get pre-approved, apply for and manage your mortgage all in one place. (Note that you aren’t able to use eHome if you’re applying with more than one other co-borrower, or if you’re attempting to switch mortgages in Quebec.)

Getting started with the eHome process might take a little longer if you’re not a Scotiabank customer, as the bank will need to collect some basic personal information from you. Once you’ve opened your eHome account, you can begin the mortgage process. Scotiabank even estimates how long each application might take:

• Mortgage pre-approval: 20 minutes.
• Mortgage application: 25 minutes.
• Switching a mortgage to Scotiabank: 25 minutes.

You don’t have to apply for a mortgage online. If you’d rather speak directly to a Scotiabank Home Financing Advisor, you can request either a telephone or in-person meeting through the bank’s website or by calling 1-877-303-8879.

Amounts and terms 

Scotiabank doesn’t appear to have a maximum mortgage amount. Its loan terms range from six months for its convertible mortgage product to 10 years for a closed, fixed-rate mortgage. Its variable-rate mortgages are available in three- and five-year terms.

Mortgage rate transparency

Scotiabank isn’t entirely upfront about its mortgage rates. The bank makes its posted rates for every product available publicly, but it doesn’t publish its discounted mortgage rates.

That may be because Scotiabank’s discounted rates are made available to the bank’s mortgage broker partners. Not posting discounted rates even though they’re available can also give customers the impression that they’re getting a uniquely sweet deal during rate negotiations. 

If you’re discussing your mortgage options with Scotiabank, be sure to ask if you’d be offered a lower rate if you apply through a broker. 

Rate types

Scotiabank offers both fixed and variable mortgage rates. With the exception of its two short-term options, Scotiabank’s fixed-rate mortgages are all closed. Its variable-rate mortgages are offered as either open or closed.

Mortgage fees

Fees are an area where Scotiabank could improve on transparency. The bank does not provide any public information regarding additional fees you may incur during the mortgage process. Finding the annual percentage rates associated with Scotiabank’s various mortgage products requires digging into the fine print on the bank’s website. 

Scotiabank does, however, provide a rather helpful document that explains how prepayment penalties work and how they are calculated. Depending on the details of your mortgage, you can generally prepay 10-20% of your principal each year and increase your monthly payment by the same amount without triggering a prepayment penalty.

Security and safety 

Scotiabank has several processes in place to protect your accounts and personal information, including encryption, firewalls and multi-step identity verification. Scotiabank’s fraud prevention tactics cover not only its website and mobile app, but its automated banking machines, telephone banking and its debit and credit cards.

Scotiabank requires you to read its privacy agreement before you can start the online mortgage application process. The agreement is thorough and straightforward and explains how the bank uses your personal information, why your information is collected and the instances when the bank might use automated decision making. It also provides instructions for refusing or withdrawing your consent regarding the use of your personal information.

Scotiabank mortgage eligibility criteria

Because it’s a federally regulated financial institution, Scotiabank’s lending criteria will generally be quite strict. The interest rate and loan amount you’re offered will be based on your finances, but before you get that far in the process, Scotiabank will need to evaluate your:

• Credit score: Chartered banks like Scotiabank typically don’t lend to borrowers with lower credit scores. A credit score of 680 or higher is worth aiming for.
• Credit history: Having several established credit accounts in good standing, and no recent negative marks on your credit report, will help you get approved.
• Income: The amount you earn and how predictable your income is are both important factors.
• Down payment amount: You need to provide at least 5% of a home’s value as a down payment if it’s worth $500,000 or less. For homes worth between $500,000 and $999,999, you need 5% of the first $500,000 and 10% of the amount above $500,000.
• Debt service ratios: Your gross debt service ratio must not exceed 39%. Your total debt service ratio must not exceed 44%.
• Employment history: You generally have to show lenders that you’ve been consistently employed for at least two years.

How to apply for a mortgage with Scotiabank

You can start the mortgage process online, over the phone or in person at a Scotiabank branch, although the bank says approval times can be reduced if you apply through its eHome portal.

Whether you’re applying for a pre-approval or a mortgage, you’ll need to provide financial details related to your income, debt and assets. You’ll also have to grant Scotiabank permission to carry out a hard credit check, which can temporarily lower your credit score.

If you’re self-employed, you may be asked to provide additional documentation so Scotiabank can fully assess your finances and ability to repay a mortgage. 

Alternatives to a Scotiabank mortgage 

Scotiabank is just one of many Canadian mortgage lenders. If the product you need isn’t available at Scotiabank, there are other Big Six banks, credit unions and B lenders you can turn to.

You can also consider reaching out to a mortgage broker and asking for help in finding a better deal on your home loan.

How to choose the right mortgage lender

Selecting the right mortgage lender is an important decision. Not only do you want to get the best mortgage rate, you’ll also want to align with a lender whose products, terms and conditions align with your financial needs.  

To do all that, it’s helpful to do each of the following:

• Understand the different types of lenders: Mortgage providers include banks, credit unions, alternative lenders, and private lenders. Each has its own pros and cons.
• Compare offers from multiple lenders: Don’t commit to a mortgage from Scotiabank or any other lender until you have a solid idea of what constitutes a good current mortgage rate.
• Don’t focus solely on rates. The interest rate is important, but it’s just one part of the mortgage equation. It’s also important to consider a lender’s reputation, the types of loans they offer, any fees they charge, and how much prepayment flexibility you’ll have.

How Scotiabank calculates your mortgage payment

Like most lenders, Scotiabank will consider the following when calculating your monthly mortgage payment:

• Home price: the amount you agree to pay for a home.
• Down payment: how much you can afford to pay upfront on your home purchase.
• Amortization period: the total time it takes you to pay off your mortgage.
• Mortgage term: how long your mortgage contract will be in effect.
• Payment frequency: how often you’ll make mortgage payments.
• Mortgage interest rate: the amount a lender charges you to borrow its money; expressed as a percentage of the loan amount.
• Property taxes or title transfer fee: an annual fee based on your property value; not all mortgages are set up to include these fees.
• Mortgage default insurance: an extra cost you’ll pay if your down payment is less than 20%.

Example:

• Home price: $650,000
• Down payment: $58,500 (9%)
• Amortization period: 25 years
• Mortgage term: 5 years
• Payment frequency: Monthly
• Mortgage interest rate: 5.5%
• Mortgage insurance: $23,660

About the Author

Clay Jarvis

Clay Jarvis is NerdWallet’s mortgage and real estate expert in Canada. Thus far, his entire professional writing career has revolved around real estate. Prior to joining NerdWallet, he was the…

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