Access Equity Fast Without Refinancing
Keep your existing mortgage rate and tap into your home equity with a second mortgage. Quick approvals, flexible terms.
What Is a Second Mortgage?
A second mortgage is a loan taken against your home's equity while your existing (first) mortgage remains in place. Unlike refinancing, which replaces your current mortgage entirely, a second mortgage is an additional loan that sits behind your first mortgage in priority.
For Ontario homeowners who have built equity but don't want to disturb their first mortgage—perhaps because of a favorable rate or to avoid prepayment penalties—a second mortgage offers a way to access that equity quickly and efficiently.
Second mortgages are available through banks, alternative lenders, and private lenders, each with different qualification requirements, rates, and terms. As a mortgage agent with access to all these channels, I can find the best second mortgage solution for your specific situation.
Second Mortgage vs. Refinancing
Second Mortgage
- Keep your existing first mortgage rate
- Avoid prepayment penalties
- Faster approval and closing
- Lower closing costs
- Easier qualification
Refinancing
- One mortgage, one payment
- Potentially lower blended rate
- Longer amortization possible
- Best when first mortgage rate is high
- Good at renewal time
Benefits of a Second Mortgage
Protect Your First Rate
If you have a low rate on your first mortgage (especially from 2020-2021), a second mortgage lets you access equity without losing that favorable rate.
Speed
Private second mortgages can close in days, not weeks. Ideal when you need funds quickly for opportunities or emergencies.
Avoid Penalties
Breaking a fixed-rate mortgage early can cost thousands in penalties. A second mortgage avoids this completely.
Flexible Qualification
Private second mortgages focus on equity rather than income or credit, opening doors for those who don't qualify for traditional refinancing.
Who Qualifies for a Second Mortgage?
Qualification depends on the lender type:
Bank/Credit Union Second Mortgages
- Good credit (typically 650+)
- Provable income meeting debt service ratios
- Maximum combined LTV usually 80%
- Lowest rates but strictest requirements
Alternative Lender Second Mortgages
- Fair credit (580+)
- More flexible income verification
- Maximum combined LTV up to 85%
- Middle-ground rates and requirements
Private Second Mortgages
- Credit score is secondary to equity
- Income verification often not required
- Maximum combined LTV up to 90-95%
- Higher rates but maximum flexibility
The Second Mortgage Process
Quick Consultation
20 minWe assess your equity, discuss your needs, and determine whether a second mortgage or refinance is the better option.
Application
1 daySubmit a streamlined application. Documentation requirements are lighter than full refinances, especially for private lenders.
Property Valuation
1-3 daysQuick appraisal or desktop valuation confirms your home's current market value and available equity.
Approval
1-5 daysReceive lender approval and final terms. Private lenders can often approve within 24-48 hours of receiving documents.
Legal & Closing
2-5 daysYour lawyer registers the second mortgage. The process is simpler than refinancing since your first mortgage stays in place.
Funds Released
Closing dayReceive your funds. Total timeline can be as fast as one week for private second mortgages.
Costs & Interest Rates
Bank/Credit Union
7-9%
Typical rate range
Alternative Lenders
9-12%
Typical rate range
Private Lenders
10-15%
Typical rate range
Additional Costs to Consider
- • Legal fees: $800-$1,500 (registration of second mortgage)
- • Appraisal: $300-$500 (sometimes waived for smaller amounts)
- • Lender fees: Some lenders charge setup or broker fees (1-3% of loan)
- • Title insurance: $200-$400
Real Second Mortgage Scenarios
Protecting a Great Rate
The Patels in Brampton secured a 1.99% variable rate in 2021 on their $500,000 first mortgage. When they needed $75,000 for home renovations, refinancing would have meant losing that rate and paying a significant penalty. Instead, they took a $75,000 second mortgage at 9.5%. Even with the higher second mortgage rate, their blended cost is far less than what a full refinance would cost.
First mortgage rate preserved: 1.99% | Penalty avoided: ~$15,000
Quick Business Opportunity
Marcus, a contractor in Hamilton, had an opportunity to buy equipment at auction for $40,000—but needed funds within a week. His $450,000 home had a $280,000 first mortgage. A private second mortgage was approved in 2 days and funded within a week, allowing him to seize the business opportunity. He plans to pay it off within 12 months from increased revenue.
Time to funding: 5 days | Opportunity captured: $40,000 in equipment
Credit Challenges Solution
After a job loss, Jennifer's credit dropped to 540. She needed $30,000 to consolidate debts and couldn't qualify for a traditional refinance. With $150,000 equity in her Oshawa home, she qualified for a private second mortgage despite her credit score. After 18 months of on-time payments and debt reduction, her credit recovered enough to refinance into a better rate.
Approved despite 540 credit score | Bridge to credit recovery
* These scenarios are illustrative examples. Actual rates and terms vary by situation.
Frequently Asked Questions
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Mortgage Agent Level 1 | Dominion Lending Centres | License #M23005941
Second mortgage rates and terms vary by lender and borrower qualification. Contact us for personalized guidance based on your specific situation.