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Second Mortgage

A second mortgage is simply the second loan you place against your home. A second mortgage is used to access a chunk of your available home equity, considering this it is important to have available home equity to borrow.

Borrowers use additional mortgage financing to consolidate debt into a single payment and lower rate, they also use it for financing big projects like a home renovation or a big step in their lives. A second mortgage can also be used to borrow your down payment for a second home, an investment property or a cottage getaway. There are a variety of ways to use a second mortgage, along with various type of mortgages for a variety of situations. 

At Mortgage for Less we have the experience and knowledge to guide you through the mortgage process, shop for your best rate and mortgage, advice on your mortgage options and get you approved for financing. At no cost to you have a mortgage broker work for you and your financial benefit.

How you can use a Second Mortgage

You need to access some of your home equity for your financial needs and goals

A second mortgage is the most common way  to access available equity in Canadian homes. Another mortgage can provide you with funds for a variety of reasons from helping you in a financial rut to funding some dreams and goals.

Although a second mortgage offers the advantage of accessing a chunk of home equity it usually carries a higher interest rate compared to a first mortgage, for reference a first mortgage is the one used to purchase a home.

The reason a second mortgage carries a higher interest rate is because the lender's security in the property comes second to the lender of the first mortgage. In the case that a mortgage defaults and a home must be sold to repay the mortgage, the lender of the second mortgage gets paid second to the lender of your original mortgage, therefore the second lender charges a higher rate of interest to offset the risk associated with lending on a second mortgage.

You want to borrow your down payment for another property

A second mortgage can provide you with enough financing to cover the down payment of an investment property purchase, a second home, a condo for one of your kids or a vacation property. It is highly advised that you have enough available equity to borrow to ensure that it's a financially sound move that will get approved. A lender will likely reject your application if you have too little home equity to borrow a property down payment.

Use a second mortgage as a Home Renovation Loan

A second mortgage can be used for home renovations.

A lender will be more than willing to fund your ambition to improve your home. A home is security for your loan and given that you plan to add value to that home is an added security for a loan in the case of default.

Though a lender will not likely fund or approve a renovation that involves extreme changes or additions to a home.

A big project like adding another level to your home is a risky move for a lender, as such a project given unfinished or complications could harm the value of the home that a lender is using as security for your debt.

Consolidate your debt with a second mortgage

Having multiple debts is a burden and is difficult to payoff, a second mortgage can  consolidate that debt and simplify your life. Rolling your debts and loans into your mortgage can be financially strategic and beneficial.

Consolidating your debt is simply repaying debts with mortgage proceeds. Consolidation is when a debt is paid by another debt. The advantage to consolidation is that it brings a gross owed amount under one repayment and a single lower interest rate.

A second mortgage allows you to strategically target high interest debt and amounts with a payment through a replacement mortgage debt that consolidates debts under one repayment and interest rate.

Required documents for a Second Mortgage


Why is it required?

Important things to note

Income Verification

Why is it required?

Important things to note

Current Mortgage Statement

Why is it required?

Important things to note

Property Appraisal

Why is it required?

Important things to note

Property Tax/Bill Statement

Why is it required?

Important things to note

Heating Bill and/or Condo Fees

Why is it required?

Important things to note

Void Cheque

Why is it required?

Important things to note

Need extra funds?

A second mortgage is not the only way to obtain extra funds. Have you considered a Home Equity Line of Credit?

Have a question?

Feel free to send us an email with any questions you may have about the required documents for a second mortgage.

We'd be happy to help!

How to get started with a Second Mortgage

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How getting a Second Mortgage works

Fill out our online mortgage application

We assess your financial information

We chat about your mortgage financing options

We collect your required documents

We shop for your best mortgage and rate

We submit your application to a lender

You get approved for mortgage financing

We continue to advise and standby to guide

Determine your home equity 
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