Second Mortgage
Access Your Home Equity Without Breaking Your First Mortgage
A second mortgage lets you tap into the equity you have built in your home while keeping your existing low-rate first mortgage in place. Faster than refinancing with more flexible qualification.
Second Mortgage at a Glance
Common Uses
What Can You Use a Second Mortgage For?
Second mortgages provide flexible capital for a wide range of financial needs, all secured against the equity in your home.
Debt Consolidation
Replace high-interest credit cards, personal loans, and lines of credit with a single lower payment. Many clients reduce their monthly obligations by 40% to 60% by consolidating unsecured debt into a second mortgage.
Home Renovations
Fund kitchen remodels, basement finishing, additions, or major repairs. Using a second mortgage for renovations can increase your property value while keeping your low-rate first mortgage untouched.
Emergency Funds
Medical expenses, unexpected job loss, or family emergencies require fast access to capital. A second mortgage can provide funds in days rather than the weeks or months required for a full refinance.
Tax Payments
CRA tax arrears carry steep interest and penalties that compound quickly. A second mortgage can settle your tax debt immediately, stopping the penalties and giving you a structured repayment plan.
Down Payment on Another Property
Access the equity in your current home to fund the down payment on an investment property or a second home without selling your existing residence.
Prevent Power of Sale
If you have fallen behind on your first mortgage, a second mortgage can bring your payments current and stop power of sale proceedings before your home is lost.
Compare Your Options
Second Mortgage vs Refinance vs HELOC
Each option has trade-offs. A second mortgage stands out when speed and preserving your existing first mortgage are priorities.
| Feature | Second Mortgage | Refinance | HELOC |
|---|---|---|---|
| Keeps your first mortgage intact | |||
| No penalty to break existing mortgage | |||
| Fast approval (days, not weeks) | |||
| Fixed monthly payment | |||
| Lowest overall interest rate | |||
| Flexible credit requirements | |||
| Access to revolving credit | |||
| Works with bad credit |
Rates and Costs
Second Mortgage Rates in Canada
| Lender Type | Rate Range | Combined LTV | Typical Term |
|---|---|---|---|
| B-Lender (Institutional) | 8% - 12% | Up to 80% | 1 - 2 years |
| Private Lender (Urban) | 10% - 15% | Up to 85% | 1 year |
| Private Lender (Rural) | 12% - 18% | Up to 75% | 1 year |
Rates are based on current market conditions and vary by borrower profile, property type, and location. Contact us for a personalized rate quote based on your specific situation.
How It Works
Faster Than a Refinance, No Need to Break Your First Mortgage
Because a second mortgage does not replace your existing first mortgage, the process is simpler and faster. Here is what to expect.
Free Consultation
We review your current mortgage, property value, credit profile, and goals to determine if a second mortgage is the right solution. This call takes about 15 minutes.
Application and Appraisal
We submit your application to our network of second mortgage lenders. A property appraisal is ordered to confirm your home value and available equity. Most appraisals are completed within 2 to 3 business days.
Approval and Commitment
Once the appraisal is in, we present you with the best available terms from our lender network. You review the commitment letter with full disclosure of rates, fees, and payment schedule before signing.
Legal and Funding
Your lawyer registers the second mortgage on title behind your existing first mortgage. Funds are released directly to you or to the debts being consolidated, depending on the lender requirements.
Understanding Combined LTV
Combined loan-to-value (CLTV) is the total of your first mortgage balance plus your second mortgage amount, expressed as a percentage of your home value. Most lenders cap the combined LTV at 80% to 85% for second mortgages. For example, on a home worth $700,000 with a first mortgage of $400,000, a combined LTV limit of 80% means you can borrow up to $160,000 as a second mortgage ($700,000 x 80% = $560,000 minus $400,000 = $160,000).
Some private lenders will go to 85% combined LTV in strong urban markets like the GTA, but the higher the combined LTV, the higher the interest rate. We calculate your available equity during your free consultation so you know exactly how much you can access.
Common Questions
Second Mortgage FAQ
A second mortgage is a loan secured against your home that sits behind (subordinate to) your existing first mortgage. It uses the equity in your property, which is the difference between your home value and your current mortgage balance. Because the second mortgage lender is in a subordinate position, meaning they get paid after the first mortgage lender in a sale, second mortgage rates are higher than first mortgage rates to compensate for the additional risk.
The maximum loan amount depends on your home value and existing mortgage balance. Most lenders allow a combined loan-to-value (first mortgage plus second mortgage) of 80% to 85%. For example, if your home is worth $600,000 and your first mortgage balance is $350,000, you could potentially borrow up to $130,000 to $160,000 with a second mortgage. Private lenders may go slightly higher in some cases depending on the property and location.
Second mortgage rates in Canada typically range from 8% to 18% depending on the loan-to-value ratio, your credit score, income verification, and the lender type. Institutional B-lenders offering second mortgages start around 8% to 12%, while private second mortgages range from 10% to 18%. The rate reflects the subordinate position of the lender and the overall risk profile of the loan. We work to get you the lowest rate possible for your specific situation.
It depends on your situation. A second mortgage is usually better when you have a low rate on your first mortgage that you do not want to lose, when your first mortgage has a large prepayment penalty, or when you need funds quickly. Refinancing is usually better when your first mortgage is up for renewal anyway, when the rate difference between your first mortgage and current rates is small, or when you need a large amount of capital. We compare both options for every client and recommend whichever saves you the most money overall.
Second mortgages are typically faster to arrange than refinancing because there is no need to discharge and replace your existing first mortgage. With a private lender, we can often get approval within 24 to 48 hours and fund within 5 to 7 business days. B-lender second mortgages take slightly longer, typically 2 to 3 weeks. In emergency situations such as power of sale, we have funded second mortgages in as little as 3 business days.
Second mortgage fees typically include a lender fee of 1% to 3% of the loan amount, an appraisal fee of $300 to $500, legal fees of $1,500 to $2,500 for both borrower and lender representation, and our broker fee which is disclosed upfront. All fees are typically deducted from the mortgage advance, so you do not need to bring any cash to closing. We provide a full cost breakdown before you commit to anything.
Find Out How Much Equity You Can Access
A free equity assessment takes 15 minutes. We will tell you how much you can borrow, what it will cost, and whether a second mortgage is the right solution for your needs.