A second mortgage is a strategic financial tool that unlocks opportunities for growth. It leverages your equity to empower your financial journey with flexibility and tailored

A second mortgage, often referred to as a 2nd mortgage, is an additional loan taken while the first mortgage remains in effect. Unlike refinancing or a home equity line of credit (HELOC), second mortgages typically have less stringent requirements but come with higher interest rates due to the increased risk involved.

Similar to refinancing and HELOCs, a second mortgage leverages your home equity. In the event of default, the primary mortgage receives priority in liquidation until fully paid off. Only then does the second mortgage lender receive any remaining proceeds.

People opt for second mortgages for various reasons, including:

• Investments
• Debt Consolidation
• Avoiding CMHC Fees: When lacking a 20% down payment for the primary mortgage
• Home Improvements or Renovations

While second mortgages typically carry higher interest rates compared to refinances and HELOCs, they serve as a viable option for consolidating high-interest debt such as credit cards and car loans.

• Equity: Typically 5% to 15% of home equity is required.
• Proof of Regular Payments: Utility bills, phone bills, insurance premiums, etc.
• Credit Score: Generally ranges from 550 to 700; higher scores secure lower rates.

If you possess higher equity and credit scores than the mentioned range, a home equity line of credit (HELOC) might be more advantageous. Private mortgage lenders usually offer lower rates than trust companies, but rates are still higher than HELOCs.

Most banks do not offer second mortgages due to the added risk involved. Mortgage brokers, however, have access to numerous lenders specializing in second mortgages, including mortgage trust companies and private lenders such as Home Trust and Tridac Mortgage Corporation.

Breezeful, for instance, provides access to over 100 lenders, ensuring competitive rates for second mortgages. Learn more about us here.

• Home Appraisal Fees
• Title Search and Insurance
• Legal Fees

To estimate your eligible second mortgage amount:

• Calculate 80% of your home's appraised value.
• Subtract the unpaid balance of the first mortgage.

For example, if your home is valued at $700,000 and the remaining balance on the first mortgage is $240,000, you could potentially qualify for $320,000 ($700,000 x 80% - $240,000).

Applying for a Second Mortgage: Ensure your credit is in good standing, and you have proof of bill payments and adequate home equity. Connect below to determine your eligibility and explore how much you can secure through a second mortgage.