Scotia STEP vs. TD FlexLine: Which Readvanceable Mortgage Wins?

When it comes to flexible mortgages in Canada, two heavyweights dominate the conversation: the Scotia Total Equity Plan (STEP) and the TD Home Equity FlexLine.

Both are "readvanceable" mortgages, meaning that as you pay down your principal, your available credit limit automatically increases. It’s like having a giant financial umbrella over your home. But while they look similar on paper, they serve very different types of clients.

Here is the breakdown of how these two stack up and who they are really for.

The Scotiabank STEP: The Multi-Component Powerhouse

The Scotia STEP, or Scotia Total Equity Program, is widely considered the most flexible mortgage product in the country. It isn't just a mortgage; it’s a borrowing platform.

• The "Highest Approval" Advantage: One of the main reasons we move clients toward Scotia is their aggressive qualifying rubrics. We are often able to secure the highest approval amounts with Scotia compared to other big banks, which is a game-changer for clients in high-priced markets like the GTA.

• Ultimate Customization: The STEP allows you to have multiple components under one account. You could have a 5-year fixed portion for stability, a variable portion to ride the market, and a separate HELOC for a renovation—all under one "Global Limit."

• The "Smith Manoeuvre" King: If you are looking to make your mortgage tax-deductible through advanced investment strategies, STEP helps you to cleanly separate accounts makes it the gold standard.

• Truly Adjustable Rate (ARM): Scotia’s variable product is an Adjustable Rate Mortgage (ARM). This means when the Bank of Canada changes rates, your payment changes immediately. While this requires a flexible budget, it ensures your amortization stays on track and you never hit a "trigger rate."

Get this if you are: Investors, business owners, and homebuyers needing maximum borrowing power and/or complex debt structuring.

The TD Home Equity FlexLine: The Foreign Income Specialist

TD’s FlexLine is a simpler, two-part structure (a term portion and a revolving portion), but where TD truly shines is in their underwriting flexibility for specific borrower profiles.

• Foreign Income Friendly: If you are a Canadian resident but earn income from the U.S. or abroad, TD is often our first choice. We help our clients leverage TD’s robust policies to ensure global income is fully recognized for qualification.

• Stable Variable Payments (VRM): Unlike Scotia, TD’s variable mortgage is a Variable Rate Mortgage (VRM). When interest rates rise, your payment stays the same, and the internal split between principal and interest shifts. This helps keep your monthly cash flow stable and predictable.

• Lower Costs & Perks: For real estate investors, TD typically charges a lower rental premium than many competitors. Additionally, TD tends to run more frequent and aggressive cashback campaigns, putting money back in your pocket at closing.

• Monthly Compounding: It is important to note that TD interest on variable payments compound monthly which would be a slightly higher cost. While Scotia variable mortgages compound semi-annually, this slight difference in math is often offset by their competitive cashback offers and lower fees elsewhere.

Get this if you are: Clients with foreign income, newcomers to Canada, and homeowners who want a straightforward, reliable line of credit.

Which one is right for you?

Choosing between Scotia and TD isn't just about the bank logo; it’s about how you earn your money and what you plan to do with your equity in the next five years.

Reach out to me if you want an award-winning top Richmond Hill mortgage agent that provides the best of both worlds. I offer the exact same rates you’d find at the bank branch, but with one major difference: unbiased professional service. Instead of a bank employee trying to sell you their specific product, I'll analyze your financial "moonshot" and help you select the exact product—be it STEP or FlexLine—that fits your unique life.

Ready to see which product unlocks the most value for your home? Click below for your personalized mortgage consultation and let's get you started on growing your wealth today!