What's a Second Mortgage? 

Imagine your house is a giant piggy bank you're still paying for. 

• The big loan you used to buy the house is the first mortgage.

• The part of the house you've already paid off is called equity. Think of it as the money you have inside the piggy bank.

A second mortgage is like getting a second, extra loan by borrowing against that equity (the money you already have in your house-piggy-bank).

People in Ontario might use this extra money for big things, like fixing the kitchen , paying for college , or handling an emergency.

Here's the key:

• Why get a second one? Sometimes, your first mortgage has a really good, low interest rate (the fee you pay for borrowing). Instead of getting rid of that great rate to get a new, bigger loan (called refinancing), you can just add a second mortgage on top. This lets you keep your good rate on the first loan!

• It's "second" in line. If you can't pay your loans, the bank with the first mortgage gets paid back first. Because the second lender is second in line, this type of loan often costs a bit more.

Want to Learn More?

Got questions or want to see if this could work for you?

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