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Second Mortgage

At Lower we believe that reclaiming the money you’ve already invested in your home should be easy. That’s why we approve most home equity loan applicants regardless of their credit. Equity in, equity out, it’s just that simple.

  • Pay off your debt at your own pace with help from home equity
  • Reduce your payment by up to 50% so your budget is balanced
  • Finance home renovations and improvements that add value

The right source for
Canadian second mortgages

Lower is Canada’s premium broker offering solutions for every type of second mortgage financing, no matter the purpose.

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    We’ll check 40+ lenders and 10,000 products in the market.

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    Get expert advice

    Speak with your trusted Lower advisors anytime.

  • We do the hard work

    We do the hard work

    Lower advisors will do all the application admin.

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  • Brian Molnar
    Brian Molnar

    Google

    Buying a home for your family is so important. Ammar made us feel comfortable with at ease with this process. He took his time to understand our needs but was very quick with the process.

  • Karen Austin
    Karen Austin

    Comparewise

    I bought my first home a few years back and used @lowerdotca. It was a great experience so I called them when I was ready to purchase my second house. Ammar and his team go above and beyond.

  • Valerie Fincher
    Valerie Fincher

    Comparewise

    We had a great experience with Ammar and his team. He explained us all of our options without us feeling the pressure or rushed. I highly recommend.

  • Jeff Mahlum
    Jeff Mahlum

    Comparewise

    I was extremely nervous being a first time home buyer in Toronto. With prices skyrocketing I wasn't sure this was the right move but after speaking to Ammar, he made me feel confident.

  • Clementine Mason
    Clementine Mason

    Google

    Ammar went above and beyond our expectations, answering all of our questions and securing us an even better rate that we'd hoped for! The entire process was very smooth and we will be recommending his mortgage services.

  • Averi Blackwell
    Averi Blackwell

    Comparewise

    I was working with a broker before and it was a nightmare. Thank goodness I found Ammar. He was always quick to respond to help us. We will definitely be using Ammar when it’s time to renew our home.

  • Melissa Dodds
    Melissa Dodds

    Twitter

    I was anxious being a first-time home buyer in the Toronto market. Ammar was referred to me by a friend of the family and he definitely made the process much easier to work through!

  • John Hartman
    John Hartman

    Comparewise

    We really appreciated Damien’s patience and compassion through this entire process. We are very happy with our rate and how easy he made our experience.

  • Ruben Gonzalez
    Ruben Gonzalez

    Comparewise

    Ammar was amazing to work with from start to finish. Found us such an excellent rate. He went above and beyond for us.

  • Nicola Weber
    Nicola Weber

    Twitter

    @lowerdotca helped me with my purchase of my third business property. He found us the best rates. I would recommend Shawn if you need to speak to anyone.

  • Brooke Cheng
    Brooke Cheng

    Twitter

    My family member recommend @lowerdotca and to speak to Ammar. He doesn't disappoint. I was very satisfied with his service.

  • Fredy Pollich
    Fredy Pollich

    Comparewise

    My previous mortgage broker retired so I had to find a new one. When I contacted Lower. The whole team is amazing. I was impressed right off the bat. Very professional.

  • Tricia Seward
    Tricia Seward

    Twitter

    @lowerdotca was recommended to me by a fellow business owner who used their services to refinance their property. I found Ammar to be knowledgeable and efficient in helping us to reduce our rate and liquidate the capital we needed to expand our business.

  • Judson Flatley
    Judson Flatley

    Google

    So glad I found Damien and Lower. The last time I had to renew my mortgage was a headache. Damine is familar with the challenges of applying as a self-employed individual and got our re-financing done without any trouble.

  • Josephine R
    Josephine R

    Google

    Lower gave us confidence in our purchase. I won’t even hesitate calling because they are just that great! Very easy to understand and work with.

  • Albert Taylor
    Albert Taylor

    Comparewise

    I've worked with Lower many times. I highly recommend them to my clients who are in need. They work hard to get the best rates.

  • William Westley
    William Westley

    Comparewise

    I was referred to Damien because I wanted to purchase the building my business is in when my landlord decided to sell. We went over all of my options and I ended up not only managing to purchase the building but also get extra funds to

  • Javier Garcia
    Javier Garcia

    Google

    Very reliable team. They are straight forward which I liked. They are honest but they also work very hard to find the best rates for you.

  • Michele Peers
    Michele Peers

    Google

    I had the pleasure of speaking to Shawn about a few things. Including purchasing property for my business and we got approved very quick. I will be using his services for my business in the future.

  • Donal Lynch
    Donal Lynch

    Twitter

    I used @lowerdotca to help with the purchase of my second investment property. Damien made the process quick and straightforward, which I appreciated as I have a hectic schedule.

FAQs about Second Mortgages

Have a different question? Contact us today.

Can I get a second mortgage to buy another house?

Yes. You can use it to buy another property, such as an investment, vacation, or rental property. You'll need sufficient equity in your current home, a good credit score, and adequate income to manage both mortgage payments, utility bills, and property taxes.

What does getting a second mortgage mean?

Getting a second mortgage means borrowing additional funds using the equity in your home as collateral. It's a separate loan on top of your primary mortgage, and you'll have to make separate monthly payments for both. But it can help homeowners access funds for various purposes, such as debt consolidation, home improvements, or major purchases.

Will getting a second mortgage hurt my credit?

It can temporarily impact your credit score due to the credit inquiry made during the application process and the increase in your overall debt. However, if you consistently make payments on time and responsibly manage your debt, the impact on your credit score should be minimal in the long run.

If you’re unsure whether a second mortgage is a good option or how it works, this article can help. Homeowners often find themselves seeking additional funds to meet various financial goals or cover unexpected expenses.

A second mortgage can be a viable solution that allows you to tap into the equity you’ve built in your home.

A second mortgage allows homeowners to access their home equity for various purposes, like debt consolidation or major purchases. To qualify, borrowers need sufficient home equity, a good credit score, and a stable income.

Two primary types of second mortgages are home equity loans and HELOCs. Be prepared for fees and interest rates that vary depending on factors like loan-to-value ratio and credit score.

This post will explore the different types of second mortgages when to consider them, the pros and cons associated with them, and more.

What is a Second Mortgage?

A second mortgage is an additional loan taken against a property that already has a mortgage, allowing homeowners to access their home equity. The lender takes a secondary position on the title, resulting in higher interest rates due to increased risk.

Homeowners can qualify for up to 90% or more of their home equity as a loan, depending on their credit score. Borrowers must make monthly payments covering both the principal amount and a fixed interest rate over a set term to avoid losing their home to the lender.

Different Second Mortgage Options

There are two main types of second mortgages: home equity loans and home equity lines of credit (HELOCs).

A home equity loan provides a lump sum secured by the home equity and repaid in installments over 5-15 years. The advantages include fixed payments and interest rates for easier budgeting. However, drawbacks include higher interest rates than the first mortgage. And there’s the risk of losing the home if the borrower misses payments.

A HELOC functions like a credit card, allowing borrowers to withdraw up to 85% of the home’s value from a revolving credit limit. HELOCs have variable interest rates, which can make monthly payments less predictable.

second mortgage - spring mortgage

When to Consider a Second Mortgage

This kind of mortgage can be a strategic choice for homeowners wanting to leverage their home equity in various situations. Some key scenarios include:

  • Debt Consolidation: Take advantage of the lower interest rates to consolidate high-interest debt, pay it off more quickly, and potentially save on interest.
  • Borrowing for Major Purchases: Fund significant purchases like medical equipment, vehicles, or urgent renovations.
  • Buying a Second Property: Purchase a cottage, investment property, or vacation home, but remember to budget for down payments, additional mortgage payments, and other expenses.

Pros and Cons of a Second Mortgage

Before deciding on a second mortgage, it’s essential to weigh the pros and cons to make an informed decision. Here are some advantages and disadvantages to consider:

Pros:

  • Large Loans: They can provide access to substantial funds over an extended period without selling your home.
  • Alternative to Refinancing: Opting for it instead of refinancing can help you save on costs such as closing fees.
  • Favorable Interest Rates: With significant equity and strong finances, you may secure better interest rates than unsecured credit products.
  • Quick Access to Funds: It is an efficient way to access large amounts of cash for home renovations or college expenses.
  • Fixed Interest Rate: It often comes with fixed interest rates.
  • Accessible with Average Credit Score: Obtaining a home equity loan with an average credit score is possible.
  • Long Terms: It can offer terms of up to 30 years.

Cons:

  • Extra Payment: It adds a new payment on top of your existing mortgage, which can strain your budget and potentially lead to debt, damaged credit, or foreclosure.
  • Fees: Additional costs associated with the lending process include loan origination, appraisal, accounting, and legal fees.
  • Difficult to Qualify: Obtaining favorable home equity products can be challenging if you have poor credit, low household income, or are a new homeowner.
  • Lower Equity: Taking on more mortgage debt reduces the equity retained in your property.
  • Risk of Negative Equity: If real estate prices drop, your debt might increase above the value of your home.
  • Risk of Losing Home: Failure to repay the loan can result in losing your home.
  • Difficulty in Relocating: Selling your home after taking a second mortgage might lead to a loss of money already paid.

How to Get a Second Mortgage

second mortgage rates in canada - spring mortgage

Finding a Second Mortgage Lender in Canada

Obtaining a second mortgage is relatively simple in Canada. You can visit your local bank or explore online lenders, such as Lower, which specializes in private mortgage services.

Remember that having a good credit score, at least 20% equity in your property, a reliable payment history, and a stable income is essential to qualify.

What You Need to Apply

To be approved for a second mortgage, lenders typically consider the following factors:

  • Home equity is essential for qualification.
  • Maintain a debt-to-income ratio of 43% or lower, with proof of income.
  • Aim for a score of 620 or higher.
  • Have at least 20% equity in your property.
  • Keep it low.
  • Demonstrate reliability in managing debt.
  • Show consistent income to handle the new loan.

Second Mortgage Fees and Rates

When considering a second mortgage, it’s essential to be aware of the fees and interest rates involved. We recommend using a good second mortgage calculator to help you determine potential fees and rates before you commit.

Fees

Understanding the various fees associated with a second mortgage will help you make informed decisions. These include:

Interest Rates

Grasping the factors influencing interest rates will help you better navigate the second mortgage landscape. Therefore, the following should be considered:

Second Mortgage Conclusion

A second mortgage can be a valuable financial tool for homeowners looking to access the equity in their homes. Working with a reputable lender is crucial.

And when searching for a second mortgage lender in Canada, consider Lower your ideal partner. With a wide range of mortgage services, they can help you navigate the process and find the best solution for your needs.