A second mortgage is an additional mortgage that is placed on a property with an existing first mortgage. Second mortgages, also called 2nd mortgages, are considered riskier than first mortgages since if the property goes into default, the first mortgage holder must be paid first. Due to the increased risk, interest rates for second mortgages are typically more than those for first mortgages.
If you own at least 20% of the equity in your home, you will be approved for a second mortgage in Ontario. A second mortgage can provide money to renovate your home or even make capital available for your business. With a second mortgage, you can make your dreams come true by using an asset you already own.
We have many private mortgage lenders across Canada who have helped our clients receive second mortgages regardless of income or credit, based on the equity in their property. Call us to get the lowest second mortgage interest rate.
Second Mortgage Interest Rates
Second mortgage interest rates are higher than bank interest rates. To get the lowest interest rate on a second mortgage you will need a loan to value ratio below 65% and have enough income to cover the monthly interest payments. Second mortgage rates are also influenced by the location and the type of property. Most lenders prefer locations in towns and cities, rural areas and farms require a loan to value ratio below 50.0% to get a low-interest second mortgage.
Why Get A Second Mortgage ?
A second mortgage can be used for various reasons, such as financing home improvements, consolidating debt, or covering payments on unexpected emergencies. The process of obtaining a second mortgage is generally much easier. Lenders are more forgiving in terms of credit worthiness and employment. Generally they are just using the equity in your home to qualify. Give us a call as we are one of the largest second mortgage providers in Ontario.
- How Does a Second Mortgage Work?
It’s similar to a first mortgage. The loan is an amount which is paid monthly using a set term agreed upon with the lender. The loan is secured by your home with an interest slightly higher than a first mortgage.
- How Does a Home Equity Loan Work?
Home Equity works by taking out a secured amount of funds using your home as collateral. You pay back interest only per month, on the portion of funds you would use. An example : $20,000 line of credit granted, you use $5,000 of the funds, you pay monthly instalments only on the $5,000. Similar to a credit card, but at lower interest.
- How Do I Apply for a Second Mortgage?
We will facilitate the entire process for you, we have lenders on standby who can close your transaction that same week. We need some basic information from you and the property to get started.