Second mortgage lenders lend against the equity in your home behind an existing first mortgage, which stays in place. Most are private lenders and mortgage investment corporations, with some alternative lenders; the big banks rarely lend in second position.
The second mortgage lenders listed here describe the regions and loan sizes they work with. In most provinces these loans are arranged through a licensed mortgage brokerage, which is also where you can compare more than one offer.
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A second mortgage is registered on title behind the first. If the property is ever sold under power of sale, the first lender is repaid in full before the second receives anything, so the second lender carries more risk and charges more for it.
The point of a second mortgage is to reach your equity without disturbing the first. That is often the right call when the first carries a low rate or would trigger a large prepayment penalty if broken, and the amount you need is modest or needed only for a short time.
Second mortgage lenders focus on combined loan-to-value: the first mortgage plus the new second, measured against the appraised value. The lower that combined figure, the more lenders will look at the file and the better the pricing.
They will also want the first mortgage in good standing and property taxes paid, because arrears on either put their position at risk. Credit and income matter less than for a first mortgage, which is why seconds are often used for debt consolidation after a credit setback.
Expect a rate well above the first mortgage, a lender fee and a brokerage fee, plus legal and appraisal costs. These should be disclosed in writing before you sign, and the comparison that matters is total dollar cost over the time you expect to hold the loan.
Before taking one, compare a home equity line of credit behind the first, a full refinance at renewal, or a blended increase from your current lender. A second mortgage wins when those are unavailable or would cost more once the penalty on the first is counted.
A second loan is registered behind your existing mortgage, which stays in place. It is repaid after the first if the property is sold in a default, so it costs more. It lets you use your equity without breaking a first mortgage that has a good rate or a high prepayment penalty.
Mostly private lenders and mortgage investment corporations, with some alternative lenders and a few credit unions. They are usually reached through licensed mortgage brokerages. Check the brokerage or lender with the provincial regulator, listings here are self-reported.
Often, yes. Second mortgage lenders lean mainly on the equity left in the property after the first mortgage, so a low score raises the price rather than ending the conversation. The first mortgage and property taxes need to be up to date.
Usually short: often one to two years, sometimes less, and frequently interest-only. It is meant to be repaid or folded into a new first mortgage at the next renewal, so plan that exit before you sign.
