HomeMortgage"The variable customer is in good shape," says Scotiabank

“The variable customer is in good shape,” says Scotiabank

Scotiabank reaffirmed the strength of its variable-rate mortgage portfolio, despite the higher costs faced by borrowers due to rising interest rates.

The comments were made during the bank’s fourth-quarter earnings call on Tuesday, in which Scotia reported a 20% year-over-year drop in net income, but also an 11% increase in mortgage volumes.

Of Scotia’s $302 billion mortgage portfolio, $112 billion worth, or 37%, has a variable rate. The bank is also the largest mortgage lender to offer adjustable-rate mortgages, which are variable-rate mortgages with payments that fluctuate as prime rate rises or falls.

Because of this, the bank’s variable-rate clients don’t have to worry about hitting their “trigger rate,” since their payments are regularly adjusting to cover the higher interest costs.

“We believe strongly that a variable rate…

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