Second Mortgage

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Use The Second Mortgage Calculator in Ontario To Get Second Mortgage Interest Rates, Monthly Payment & Home Equity.

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Fast second mortgage

Fast Second Mortgage Closing

Fast second mortgage approval and closing from direct 2nd mortgage lenders

Best Second Mortgage Rates

Best second mortgage rates in Canada offered from direct second mortgage lenders.

Bad Credit Second Mortgage

Bad credit home equity loans approved as the loan approval is based on equity.

What Is A Second Mortgage Loan?

Second mortgages explained

A second mortgage loan is a lien / charge registered on the title (deed) of a property in second priority, for the purpose of getting financing from the equity of a home. Second mortgages, have a term, interest rate, monthly payment, pre-payment penalties, maturity date and the same characteristics as a first mortgage.  Although there are similarities between first and second mortgages, in terms of framework, the term, interest rate, monthly payment, and features of a second mortgage differ greatly from a first mortgage.

A second mortgage interest rate is higher than a first mortgage interest rate, as lenders are exposed to higher risk for having a second mortgage priority on the title of the property. Also, second mortgages traditionally don’t have credit or income qualifying requirements. 

How Does A Second Mortgage Work?

Second mortgage process

Just like a first mortgage, the process to get a second mortgage is very similar, however there are different qualification requirements.  
  • Borrower(s) must apply for a second mortgage
  • Their mortgage broker will order a property appraisal from an approved appraisal company
  • Once the appraisal inspection has been complete, and the report provided, the broker can shop with second mortgage lenders to get a mortgage commitment
  • Upon the mortgage commitment being issued and signed by all parties
  • All conditions of the mortgage commitment must be satisfied, then the lender will send mortgage instructions to the borrower(s) lawyer
  • The borrower(s) then would arrange to meet with their lawyer to sign final second mortgage closing documents
  • On the date of closing, the lender will fund the second mortgage, once they are satisfied with all conditions

How To Get A Second Mortgage

Getting a second mortgage

To begin the process in getting a second mortgage, first you will need to first consult options with a mortgage broker prior to submitting an application, to preliminarily understand what is involved in the second mortgage process, including costs.

After consulting second mortgage options with a mortgage broker, all borrower(s) must complete a mortgage application and provide valid government issued photo ID. The mortgage brokerage will then order an appraisal inspection and the borrower will schedule the inspection directly with the appraisal company. It is important for the mortgage broker to order the appraisal as it must be from a lender’s approved appraisal company.

Once the mortgage broker has received a mortgage commitment with terms, and an interest rate agreeable to the borrower(s), the borrower(s) will need to sign the second mortgage approval documents and fulfill all conditions required by the second mortgage lender. Second mortgage approvals traditionally don’t have income or credit qualification requirements. Upon all conditions being satisfied, the borrower will need to arrange to meet with his/her lawyer to sign and complete the mortgage, and receive any funds, should there be monies available from the equity take out.

Second Mortgage Rates Explained

What are second mortgage rates?

Second mortgage rates are usually higher than first mortgage rates, as there is higher risk to a lender lending a second mortgage. Most lenders will have a set return on investment (ROI) they wish to have for their mortgage loan. The ROI yield is usually between 12% to 14%. In a second mortgage, for the investor, the ROI is comprised of the second mortgage interest rate, and a lender fee.

Second mortgage interest rates can range from 8.99% to 12.99%, depending on the loan to value and overall risk profile of the borrower. Second mortgage rates are determined by the overall risk factors to the second mortgage lender.

How Much Can I Borrow As A Second Mortgage?

Requirements For A Second Mortgage

There are very minimal requirements for a second mortgage. Second mortgage approvals are based upon the equity available in a property. Second mortgage lenders require a minimum of 10% to 15% equity in a property.

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