What is a second mortgage?

Second Mortgage is a secured Mortgage loan that has been taken out on the property that’s already been Mortgaged. A Second Mortgage would be registered in second position behind the borrowers first Mortgage. A Second Mortgage can be undertaken and beneficial to home owners for various reasons. Some of these reasons can include: Home Renovations (to help improve the property condition which would also increase the property value), Consolidating Debts (to help eliminate high interest credit card debts, which would help improve credit situation), obtain funds for the down payment and closing costs required for a new investment property purchase.

In case of a Second Mortgage, the amount that can be borrowed is based on the available equity in the property. Equity is the difference between the current value of the property and the amount owed on it.

Since a Second Mortgage is taken on a property that’s already been Mortgaged and lenders are exposed to a higher risk, the rate of interest of a Second Mortgage is higher than the rate of interest of the First Mortgage.

While a Second Mortgage is similar to a First Mortgage in terms of framework, the two are very different from each other in regards to the rate of interest, term, monthly payment and features.

Second mortgage process

Even though the process to apply for a Second Mortgage is very similar to a First Mortgage, a Second Mortgage has different criteria’s for qualification.

  • The borrower needs to apply for the Second Mortgage with a Mortgage Broker by completing a Mortgage Application form and providing the Mortgage Broker with a none expired valid Government issued Photo ID along with some supporting documents for reference to which the lender will be requesting. These supporting documents are generally: Updated/current Mortgage statements, property tax bill and a recent copy of the borrowers NOA or tax summary.
  • The Mortgage Broker will then process the borrowers file and order an appraisal for the client in order to confirm the property value to the lenders, while shopping the clients file for a Second Mortgage Approval. The appraisal has to be undertaken by the given lenders list of approved appraisal companies.
  • Once the property appraisal is completed by a Professional appraiser and an appraisal report is provided to the broker, the Mortgage broker will then shop the clients file to Second Mortgage lenders in order to receive an Approved Mortgage Commitment.
  • Once a Mortgage Commitment, detailing the terms and conditions of the loan such as rate of interest is issued, it will be signed by all the parties involved such as the borrower, lender and Mortgage Broker.
  • If all of the conditions of the Mortgage Commitment are satisfied, the lenders lawyer will send the Mortgage instructions to the borrowers lawyer.
  • Once the Mortgage instructions are received, the borrowers lawyer will arrange a meeting with the client in order to sign and finalize the Second Mortgage closing documents.
  • On the date of closing, if the lender is satisfied with all of the conditions, the Second Mortgage will close and the client will be funded shortly after.
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Second Mortgages have more risk involved therefore, lenders generally charge a higher rate of interest compared to a First Mortgage interest rate. Depending on the loan to value and the overall risk profile of the borrower (such as income/credit and debt servicing ratios), the rate of interest for a good Second Mortgage can be anywhere between 7.99% to 9.99%. Equity Mainly Matters is well known within the Mortgage industry for helping their clients obtain the lowest rates offered for Second Mortgages.


Since the approval of a Second Mortgage is based on the equity in the property, Second Mortgage lenders require a minimum of at least 20% of equity remaining in a property in order to approve the borrowers Second Mortgage loan.

Hamilton, Ontario

I had a very pleasant experience working with Shawn Sef at Equity Mainly Matters Loans. We contacted Shawn looking for help in order to pay off our high interest credit card debts. Shawn made the process very easy for us by explaining the Mortgage loan details for the Debt Consolidation Mortgage Solution which he recommended for us. Shawn was actively present every step of the way and was very knowledgeable. I will definitely recommend Shawn to my peers due to his knowledge, professionalism and expertise.

Brampton, Ontario

Shawn is extremely passionate about his job. Shawn always demonstrates a positive and professional attitude. His easy going and friendly personality always makes the experience of working with him fun and stress free. Shawn made the entire Mortgage loan process very simple for me to which I’m thankful for. Shawn is very proactive and updates me on a regular basis in regards to my file.

Markham, Ontario

Me and my husband had never worked with a Mortgage Broker before. I needed to consolidate all of my debts. I was paying high monthly interest fees to my creditors and my bank informed me that I couldn’t get approved with them because of my low credit score. Shawn did an excellent job by helping me consolidate and pay off all of my various high interest debts. I’m now debt free. My credit score has improved and I don’t owe creditors any monthly high interest payments. We went from paying $1,650 month towards our credit card debts and loans, to now paying only $520 month which helped us build up a good savings. Shawn rescued us from our creditors and helped us save an extensive amount of money for our families future.


As a first time home buyer, we required a Mortgage broker who was willing to be very patient with us and to explain every detail of the Mortgage loan process and provide us with as much information as possible. Shawn informed us of the exact required down payment amount (based on the types of lenders that we qualified for), fees, closing costs, Land Transfer tax etc. Shawn was very good in providing us with accurate rates, figures and calculations which we realized we could afford the monthly Mortgage payments and make the Home Purchase work. One other important factor was that Shawn kept on top of our file by updating the progress every step of the way which was very important to us. Shawn is very proactive which we appreciated!

Toronto, Ontario

Shawn helped our family obtain a low rate 2nd Mortgage from a Private Lender. Banks turned us down as we failed to meet their requirements for the stress test, income and credit criteria. However, Shawn was able to find various Private Lenders/Investors that were interested in making us an offer and we ended up taking a great offer for a 2nd Mortgage which made the most sense for us. We will definitely refer our family and friends to Shawn in the near future. I can’t say how much I appreciate all the time and effort Shawn put into our file.

Mississauga, Ontario

Shawn demonstrates excellent customer service skills. He’s always very quick to respond to my emails and calls. Shawn helped me get approved twice in the past year alone and I hope to work with him again in the near future. Shawn was very friendly, attentive and dedicated his time and effort by providing me with solid knowledge, expertise and advice which in return helped the process of purchasing my first home very easy and stress free. Shawn even followed up on my behalf with my lawyer in order to finalize all the details. I would highly recommend his services.

Ottawa, Ontario

From the first time I spoke with Shawn Sef, I felt comfortable and at ease which was due to his calm and patient personality and attitude. He was also very understanding and caring to our current situation and needs by providing the best course of action for us to take which made the most sense for our family. Shawn is very knowledgeable within the mortgage field and delivered exactly what he said he would. He even provided us with accurate closing/funding dates from day one. I would definitely recommend Shawn Sef to any borrower looking for a good
Mortgage broker.

Toronto, Ontario

Shawn had helped my wife and I obtain a 2nd Mortgage from a Private Lender last year. We used the majority of the Mortgage loan proceeds to help renovate/upgrade our home. Once the refurbishments had concluded, we ordered a new appraisal and noticed that our house value had increased substantially. The following year, Shawn helped us refinance both our Institutional and Private Mortgages into a new low rate, 1st Mortgage with an A Lender (Bank) which is going to help us save an extensive amount of money in monthly payments moving forward. I’m very thankful for Shawn’s knowledge, skills and expertise within the mortgage industry which ended up helping us save thousands of dollars.