Second Mortgages · Toronto & GTA
Borrow against your equity. Keep your first mortgage.
A second mortgage is a separate loan registered behind your current mortgage. It can release funds without breaking your existing rate, often within days rather than weeks, subject to lender criteria.
How a Second Mortgage Works
A second loan, second in line.
Your first mortgage stays exactly as it is. The second mortgage is registered against your home in second position, which means it is repaid after the first lender if the home is sold. That extra risk to the lender is why rates and fees are higher.
Your first mortgage stays put
Your rate, term and payment on the first mortgage do not change, and no prepayment penalty is triggered.
Lump sum, registered second
You receive one advance, registered behind your existing lender. Combined borrowing is usually capped near 80% of value, sometimes higher with private lenders.
Short-term by design
Most terms run 6 to 24 months with alternative or private lenders, so you need a plan to repay or replace it.
Who It May Suit
Is a second mortgage right for you?
May suit you if
- Your first mortgage has a low rate or a large prepayment penalty you want to avoid.
- You need funds quickly, for example to clear CRA arrears, consolidate debt or close a time-sensitive deal.
- You don't currently qualify for a bank refinance because of credit, income documentation or debt ratios.
- The need is short-term and you have a clear exit, such as a sale, a refinance at renewal or an expected payout.
May not be the best fit if
- You need to borrow for many years. Higher rates add up quickly over a long period.
- You have no realistic plan to repay or refinance it when the term ends.
- You have limited equity, generally less than about 20% after the new loan.
- You could qualify for a refinance or HELOC at a significantly lower total cost.
How Repayment Works
What paying it back looks like.
A second mortgage is paid separately from your first, so you will have two payments each month. The structure depends on the lender, and most are designed to be repaid or replaced within a short term.
Two separate payments
Your first mortgage payment continues unchanged, and the second mortgage has its own monthly payment.
Interest-only or amortized
Private lenders often offer interest-only payments to keep costs low. Alternative lenders may require principal and interest.
Short term, full balance due
Terms are typically 6 to 24 months. At maturity the balance is due and is usually repaid, renewed or refinanced.
Exit strategy
Common exits include refinancing both mortgages together at renewal, selling the property or paying it out with expected funds.
Costs & Risks
Know the full cost before you borrow.
We put every fee and trade-off in writing before you commit, so you can compare options on total cost rather than rate alone.
Costs to expect
Higher interest rate
Rates are higher than first mortgages because the lender is second in line. Private seconds are generally the most expensive.
Lender and broker fees
Alternative and private seconds commonly carry a lender fee and a brokerage fee, often a percentage of the loan and usually deducted from the advance.
Appraisal, legal and title
Expect an appraisal, independent legal fees, title insurance and registration costs.
Renewal or discharge fees
Renewing at the end of the term or paying out early may carry additional fees, depending on the lender.
Risks to weigh
Two payments to manage
Carrying two mortgages increases your monthly obligations. Make sure the combined payment fits your budget.
Maturity risk
If you cannot repay or refinance at the end of the term, renewal may be costly or unavailable.
Your home is the security
Missed payments can lead to enforcement action, including power of sale, by either lender.
Less equity for later
Borrowing now reduces the equity available for future needs or when you sell.
When an Alternative May Be Preferable
Sometimes a different route costs less.
A second mortgage is one tool among several. These are the situations where we would usually look at another option first.
Estimate Your Equity
See how much equity may be available.
Most lenders cap total borrowing, first and second mortgage combined, at around 80% of your home value. Move the sliders to estimate your room.
Estimate only. Some private lenders may lend above 80% combined, and your actual limit depends on an appraisal, your credit, income and lender criteria.
Estimated available equity
$270,000
Ways to Access Your Equity
Three routes. One honest comparison.
The Process
From first call to funds in hand.
Free consultation
We review your home value, current mortgage, credit, income and what the funds are for.
Compare every route
Refinance, second mortgage or home equity line: we show the total cost of each side by side.
Appraisal & approval
We coordinate the appraisal, package your file and work toward an approval with a suitable lender.
Sign & fund
You sign with a lawyer and the funds are advanced. We stay involved through funding day.
Common Questions
Good questions. Honest answers.
Most lenders allow combined borrowing of up to about 80% of your home's appraised value, minus your first mortgage balance. Some private lenders may go higher depending on the property and your exit plan.
Usually not, but some first-mortgage terms restrict additional charges. We review your mortgage documents to check before you apply.
Often, yes. Because the loan is secured by your equity, alternative and private lenders typically focus more on equity, the property and your exit strategy than on your credit score alone.
Private second mortgages can sometimes fund within a few business days once the appraisal and legal work are complete. Alternative lenders may take one to three weeks.
The balance becomes due. Most borrowers renew with the same lender, refinance both mortgages into one, or repay it from a sale or other funds. We plan this with you from the start.
Sometimes. If breaking your first mortgage triggers a large penalty, a short-term second can cost less overall. If the penalty is small, a refinance is usually cheaper. We compare the total cost of both.
Take the First Step
Get a clear answer before you commit.
Tell us what you need the funds for. A licensed broker will compare a refinance, a second mortgage and a home equity line for your situation, with the costs in writing.
Free service, no obligation. Licensed mortgage brokerage, FSRA #13747. Serving Toronto, the GTA and Ontario.
Explore your second mortgage options
Takes about 60 seconds. A licensed broker follows up within one business day.
Second mortgages are subject to appraisal, lender criteria and approval. Rates, fees and terms vary by lender and may change without notice. Private and alternative lending typically involves higher costs. FSRA Lic. 13747.