Second Mortgage Calculator

What Is A Second Mortgage Calculator?

Second mortgage calculator is a mortgage calculator used to calculate second mortgage payment. Second mortgage calculator can calculate second mortgage loan you can borrow against your home, with rates offered by second mortgage lenders in Canada. Using a 2nd mortgage calculator does not require your credit or personal details.

Second mortgage lenders in Canada use a second mortgage calculator as the first step to determine how much you can borrow from your home. Typically, home owners can borrow up to 90% LTV (loan to value) as a second mortgage on their property. It is crucial to determine the equity available to borrow, as well as the equity remaining in the property.

How Second Mortgage Calculator Works?

second mortgage calculatorThe second mortgage calculator is very easy to use, to determine if you qualify for a second mortgage loan, and to determine your second mortgage rate, and monthly payment.

Simply enter your property value, first mortgage balance, as well as any existing second mortgage or liens registered on your home. The 2nd mortgage calculator will then show you how much equity you have available in your home, to use as a 2nd mortgage. The 2nd mortgage calculator will also calculate second mortgage interest rate, and monthly payments based on the home equity you have available.

Use Second Mortgage Calculator To Calculate Second Mortgage Payment

A second mortgage payment is usually based on interest only monthly payment instalments . Interest only mean the borrower will not pay down any of their principal balance.

Since second mortgage lenders only require interest only payments, there is no amortization on the mortgage. Most second mortgage lenders usually offer a minimum of 6 month term, to a 1 year term, potentially with the option to renew the mortgage.

Example Second Mortgage Payment Calculation

To calculate the second mortgage payment for a $100,000 second mortgage, with a 1 year term, at an interest rate of 7.99%, is $665.83 per month.

The calculation is as follows: $100,000 x 0.0799% = $7,990. This is the total interest paid for the entire one year. Then divide the total interest for one year, by 12 (the number of months in a year), and you will get the monthly payment for a second mortgage.

Second Mortgage Calculator: How Much Can I Borrow Against My Home?

Second mortgage loans in Canada are based on the current real estate market conditions, which determines the equity available for a second mortgage loan. Lenders don’t have many requirements for getting a second mortgage other than equity in a property. Traditional income and credit requirements are not applicable for accessing the equity reserved in your property.

To determine how much you can borrow against your home, equity lenders will require a recent appraisal report, completed within 30 days of the mortgage application, by a professional appraisal company. In an inclining real estate market, second mortgage lenders will lend up to 90% of the property value. When the real estate market is uncertain or if the market cools down, 2nd mortgage lenders will generally scale back their loan to value, to approximately 75% or 80% of the property value.

How To Calculate Second Mortgage Loan You Can Borrow Against Your Home

To calculate how much you can borrow against your home, for a second mortgage loan at 90% LTV, use the following calculation in the example below:

Example: $500,000 property in Ontario, with a $300,000 first mortgage with a bank.  The calculation is as follows ($500,000 x 0.90)100 = $450,000. This amount is total amount at 90% LTV which can be borrowed against the home. Since there is a $300,000 existing first mortgage, you must subtract $300,000 from $450,000 ($450,000 – $300,000) = $150,000. In this example you can borrow $150,000 at 90% LTV.

How To Calculate A Second Mortgage Loan If You Already Have a Second Mortgage

Referring to the above example, to calculate how much you can borrow against your equity, if you already have a second mortgage, use the following calculation:

Example: $500,000 property in Ontario, with a first mortgage of $300,000, and an existing second mortgage or $85,000.  The calculations is as follows ($500,000 x 0.90)100 = $450,000. Now you must deduct $300,000 first mortgage, and $85,000 existing second mortgage from the $450,000 total mortgage amount ($450,000 – $300,000 – $85,000 = $65,000. This mean you can get a new $150,000 second mortgage at 90% LTV. Since you have an existing second mortgage, then the equity available after your current 2nd mortgage is paid out is $65,000.

Use The Second Mortgage Calculator To Calculate Second Mortgage Rate in Ontario?

Calculate Second Mortgage Rate

Second mortgage rates in Ontario will vary based on the loan to value. The LTV is the percentage of total mortgage registered on a property. Second mortgage interest rates in Ontario can range anywhere between 5.99% and could be as high as 12.99% depending on the loan to value. When second mortgage lenders determine 2nd mortgage interest rates, they will first calculate the loan to value, and the lower the loan to value is, then the lower the interest rate will be. The higher the LTV is the higher the second mortgage rate will be.

This is all based on equity remaining in the property, which will act as security for a second mortgage lender, in the event the borrower(s) default(s) on the 2nd mortgage terms.

Since Second mortgage rates are determined by the loan to value, or the amount of equity a homeowner is seeking to borrow. This chart demonstrates the the typical interest rates second mortgage lenders offer for second mortgages.

Loan To Value Ratio
Second Mortgage Rate
85.01% – 90%
12.99% – 13.99%
80.01% – 85%
10.99% – 12.99%
75.01% – 80%
8.99% -12.99%
70.01% -75%
7.49% – 9.99%
<70%
5.99% – 7.49%

Note: This chart is for demonstration purposes only. Second mortgage rates are determined by a borrowers credit rating, mortgage payment history, property location, property type, and marketability of the property.

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