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Mortgage Squad Advisors
Second Mortgage

Borrow against your equity without touching your first mortgage.

A second mortgage sits behind your existing first — so you keep your low locked-in rate, skip the break penalty, and still access the equity you’ve built.

Keeps your first rateNo break penaltyUp to 80-85% combined LTVLump sum or HELOCB-lender + privateFunds in 1-2 weeks
5-star rated| FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by the Principal Broker, FSRA #13737 · Updated June 2026

Today’s best 5-yr fixed
4.19%
across 50+ lenders
Your estimated payment
$3,218/mo
Property value$750,000
Down payment$150,000
Get pre-approved Full math
Maya · AI · 24/7
Tell me about second mortgage mortgages
5-star rated| FSRA #13737| 50+ langs

You have real equity in your home, but you’re sitting on a first mortgage at a great rate you locked in years ago. Refinancing to pull that equity out would mean breaking the first — triggering a penalty that can run into the thousands — and re-pricing your whole balance at today’s higher rates. A second mortgage solves exactly this: it’s a separate loan registered behind your first, so your first stays untouched at its low rate, and you only pay the higher second-mortgage rate on the smaller amount you actually need. When your first comes up for renewal, we fold everything back into one mortgage.

What you get

Why Canadians choose Mortgage Squad Advisors.

Leaves your first mortgage — and its low rate — completely untouched
No break penalty on the first, which a full refinance would trigger
Access equity up to roughly 80% combined loan-to-value at B-lenders, 80-85% on private
Use it for anything — debt consolidation, renovations, tax arrears, a business, a down payment on a second property
Choose a lump-sum second or a revolving HELOC-style second depending on your need
Approval is largely equity-based — bruised credit, self-employment, and tight income all workable
Funds in as little as 1-2 weeks on a private second when timing matters
Interest-only payment options on many seconds to keep monthly cost low
Clear exit plan — consolidate the second into your first at renewal to drop the blended rate
All lender + broker fees disclosed in writing upfront
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How it works

Three simple steps, no pressure.

1

Equity + purpose snapshot

Tell us your home value, your first-mortgage balance, and what the funds are for. We calculate your available room up to 80-85% combined LTV and tell you whether a B-lender or private second fits — usually within 24 hours, no bureau pull to begin.

2

Match the second

B-lender second if your credit and income support it (cheaper rate, lump sum or HELOC). Private/MIC second if you need speed, flexible income, or higher LTV. We disclose the rate, term, fees, and payment in writing and pick the lowest-cost option that approves.

3

Fund + plan the merge

Your lawyer registers the second behind your first and the funds are advanced. We set a trigger for your first mortgage’s renewal date — at that point we can roll the first and second together into a single new mortgage at a blended rate, simplifying everything.

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FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

What exactly is a second mortgage?
It’s a loan secured against your home that’s registered in second position — behind your existing first mortgage. If the home were ever sold, the first mortgage gets paid out first and the second is paid from what’s left. Because the second lender takes more risk being behind the first, the rate is higher — but you only pay it on the amount you borrow, not your whole mortgage.
Why not just refinance my first mortgage instead?
If your first mortgage is at a low rate or carries a steep break penalty, refinancing can be expensive — you’d re-price your entire balance at today’s rates and pay the penalty. A second mortgage leaves your cheap first alone and layers a smaller loan on top. We always model both side by side; sometimes a refinance wins, sometimes the second does. The math decides.
Second mortgage or HELOC — what’s the difference?
A HELOC is a specific type of second-position borrowing: revolving, interest-only, usually from an A-lender at prime-plus, and it requires solid credit and income to qualify. A second mortgage is broader — it can be a fixed lump sum, can come from a B-lender or private lender, and can approve when a HELOC won’t (bruised credit, self-employed, higher LTV). If you qualify for a HELOC it’s often cheaper; if you don’t, a second mortgage is the route.
How much can I borrow?
It depends on combined loan-to-value — your first mortgage plus the new second, against your home’s value. B-lenders generally cap around 80%; private lenders go to 80-85% in strong urban markets. Example: a $700k home with a $400k first allows roughly $160-195k total in second-position room depending on the lender and location.
Can I get a second mortgage with bad credit?
Yes — second mortgages are one of the most credit-flexible products out there because they’re equity-based. Private and MIC lenders care primarily about the home’s value and your equity, not your beacon score. The rate is higher to reflect the risk, but it’s often the fastest way to consolidate high-interest debt and actually rebuild your credit.
What are second mortgage rates and fees?
B-lender seconds typically price a few points over first-mortgage rates; private/MIC seconds run higher — commonly in the high single digits to low teens — plus a lender and broker fee (often 1-3% combined), all disclosed upfront. Because you’re only paying it on the smaller second amount, the dollar cost is frequently lower than refinancing the whole first.
How fast can a second mortgage close?
A private second can fund in as little as 1-2 weeks once we have an appraisal and instruct the lawyer — sometimes faster in a true emergency. B-lender seconds take a bit longer, typically 2-4 weeks. If you’re facing a deadline like tax arrears or a closing, tell us and we’ll prioritize.
Do I have to tell my first-mortgage lender?
Your first lender doesn’t have to approve the second, but the second is registered on title behind theirs, so it becomes a matter of record. Some first mortgages have clauses about subsequent financing; we check yours and structure around any issue. In practice, registering a second behind a first is routine and rarely a problem.
What’s the exit plan?
The smart play is to treat the second as temporary. When your first mortgage reaches renewal — when you can move it penalty-free — we consolidate the first and second into a single new mortgage at one blended rate. That clears the higher-rate second and simplifies you back to one payment. We set that trigger date the day we fund.
Can I use a second mortgage for a down payment on another property?
Often, yes — pulling equity from your existing home via a second to fund a down payment on a rental or second property is a common strategy. Lenders on the new purchase will factor the second-mortgage payment into your qualifying, so we model the full picture across both properties before you commit.

Related products

HELOCPrivate mortgageDebt consolidationRefinance overviewAlternative lending overview

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HELOC vs Refinance vs Second Mortgage: 5 Ways to Choose (2026)5 Best Ways to Use Your Home Equity in Canada, Ranked by Cost (2026)

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