Second Mortgages

Canada has always been one of the better places to live in the world. A high standard of living and developed metropolitan cities has created a demand in the housing market all around Canada. The country is considered one of the best places to raise a family and with that considered, many look for a second mortgage in order to continue to build on their personal and business ventures. Securing a second mortgage from a fitting mortgage provider is crucial first step. As there are many options out there with differing interest rates, finding a tool that can help you screen and compare each provider can be very beneficial.

Smarter Loans has the resources to help you narrow down the choices and assist your search for a second mortgage. With Smarter Loan’s online directory, you can search for reputable providers in Canada and their second mortgage rates. All of the providers would be displayed on one webpage so screening and selecting a provider can feel effortless. Using the online directory can save you time researching in person, as Smarter Loans can provide the needed information for a second mortgage so that the process can be simplified.

When you have selected a provider suited for you, go ahead and click “Apply Now” next to the name of the desired provider. Complete a quick questionnaire by answering a few questions to ensure that you may qualify. On the other hand, pre-apply with Smarter Loans and we can select a provider based on your needs. This way you can move forward with your second mortgage in moments so that you can focus on your other priorities.

We can help connect you with the top second mortgage and mortgage refinancing providers in Canada.

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Top Second Mortgages Providers in Canada

Interest Rate
Starting at 2.90%
$50,000 and Up
$50,000 - Unlimited
$10,000 - $25,000
12 - 60 months

What is a Second Mortgage and How Does it Work?


A second mortgage is additional mortgage taken out on a home that already has a mortgage. It’s called a second mortgage based on the fact the mortgage was taken out second on the same property (i.e. a subsequent mortgage taken out after that would be known as a third mortgage).

For mortgage lenders, a second mortgage carries more risk than a first mortgage since the lender is in second position on the home’s title. In the event the homeowner defaults (fails to repay the loan), the lender in first position would be paid out first, while the lender in second position would be paid out based on whatever equity is left in the property. Sometimes it’s enough to pay out the amount owing to the lender in second position, sometimes it’s not; that’s why being in second position on a mortgage tends to be riskier. To protect themselves and account for the higher risk, mortgage lenders in second position almost always charge higher interest rates than those in first position.

If you’re an existing homeowner with a decent credit score and at least 20% equity in your property, you can choose between a home equity line of credit in second position and a second mortgage. The benefit of a home equity line of credit is that in many cases you’re only required to make interest-only payments. This makes it more flexible in terms of cash flow. However, if you don’t mind being tied to regular payments, a second  mortgage is worth considering. With a second mortgage, you’re required to make regular monthly payments similar to a first mortgage. However, the advantage of that is that a second mortgage is typically at a lower interest rate than a home equity line of credit. If you can afford the monthly payments, going with a second mortgage makes a lot of sense. (You also won’t have to break your existing first mortgage and pay mortgage breakage penalties.)

If you have bruised or damaged credit, these options may not be available to you. However, there may be lenders out there willing to extend you credit in the form of a second mortgage. It all depends on how much equity you have in the property (the property’s loan-to-value). Just be prepared to pay higher interest rates and a fee at alternative and private lenders.

Home Equity Loans Canada - Smarter Loans

Why You Might Choose a Second Mortgage

Do you have a lot of high-interest debt? A second mortgage offers a great way to consolidate your high-interest debt. As mentioned, the rates on a second mortgage may be higher than a first mortgage, but they’re usually lower than the rates on credit cards, car loans and unsecured lines of credit. Not only could you be saving on interest, by paying down your debts, you can help improve your credit score and qualify with a prime lender at a better interest rate sooner rather than later.

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More Articles About Mortgages

Types of Second Mortgages offered:

  • First Mortgage
  • Residential Mortgage
  • Second Mortgage
  • Commercial Mortgage
  • Mortgage Refinancing
  • Home Equity Line of Credit
  • Fixed Rate Mortgage
  • Debt Consolidation
  • Variable Rate Mortgage
  • Cashback Mortgage
  • First Time Homebuyers
  • Construction Mortgage
  • Self Employed Mortgages
  • Bridge Financing

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