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Borrow against your equity, keep your first mortgage
A second mortgage lets you use the equity in your home without breaking the mortgage you already have. We compare it with a refinance and a HELOC, and plan how you will pay it off before you sign.
- 5-yr fixed
- 4.69%
- 5-yr variable
- 3.70%
Updated Oct 8 · on approved credit · Compare to bank rates
How a second mortgage works
A second mortgage is a separate loan secured by your home that sits behind your first mortgage. Your first mortgage stays as it is, with the same rate, payment and term, so you avoid the prepayment penalty of breaking it. If the home is ever sold, the first lender is paid before the second, which is why a second mortgage costs more.
Most second mortgages come from private lenders and mortgage investment corporations (MICs), and sometimes from credit unions and alternative lenders. Many lenders go up to about 75% to 80% of your home's value, counting the first and second mortgages together, though it varies by lender, property and location. Terms are short, usually six months to two years, and payments are often interest-only. Before you sign, we compare it with a refinance and a HELOC, put every cost in writing and agree on how the loan will be paid off.
When a second mortgage can make sense
Keeping a good first mortgage
Your first mortgage has a low rate or a large prepayment penalty, so breaking it to refinance could cost more than borrowing behind it.
Debt or CRA arrears
Pay off high-interest cards and loans, or catch up on money owed to the CRA, and replace several debts with one loan.
Renovations and short gaps
Fund a renovation, bridge a gap until a sale or your first mortgage's renewal, or meet a business need.
How it works
How we arrange a second mortgage
Check your equity
We estimate your home's value and what you owe on your first mortgage, to see how much room there is within a lender's limit.
Compare the alternatives
A second mortgage, a refinance and a HELOC side by side, including any penalty for breaking your first mortgage.
Full cost in writing
You get the rate, the lender and broker fees, and the appraisal and legal costs in writing before you commit.
Set the exit
We agree how the loan will be paid out, from a sale or by rolling it into your first mortgage at renewal, and review your progress before the term ends.
Frequently asked questions
You have questions — we have answers!
Second Mortgages in BC
How much can I borrow with a second mortgage?
Many lenders go up to about 75% to 80% of your home's appraised value, counting your first and second mortgages together. On a $1,000,000 home with a $600,000 first mortgage, that leaves room of about $150,000 to $200,000 before costs. The limit depends on the lender, the property and its location, and rural or unusual homes usually get less. Lenders also want to see how you will carry the payments and how the loan will be repaid.
What does a second mortgage cost?
More than a first mortgage, because the second lender is paid only after the first if the home is sold. Each lender sets its rate after looking at your equity, the property and your exit plan, and payments are often interest-only. Expect a lender fee and a broker fee, plus an appraisal and legal costs. We give you all of it in writing before you commit, so you can weigh the total against a refinance or a HELOC.
Is a second mortgage better than refinancing?
It depends on your first mortgage. A refinance can go up to 80% of your home's value at a first-mortgage rate, but breaking your mortgage before the term ends may mean a prepayment penalty, and you have to qualify for the whole new loan. A second mortgage leaves your first one alone, so there's no penalty, but it costs more and runs for a short term. If your penalty is large or your renewal is close, a second can cost less overall. We price it both ways.
Should I use a HELOC instead?
If you qualify, a HELOC usually costs less. The revolving part of a home equity line can go up to 65% of your home's value, and up to 80% combined with your mortgage. But you need the income and credit to qualify, and federally regulated lenders apply the stress test. A second mortgage leans more on your equity than your income, so it can help when a HELOC isn't available, at a higher cost and for a shorter term.
How do I pay off a second mortgage?
With a plan agreed before you sign. The two usual exits are paying it out from the sale of a property, or rolling it into your first mortgage when that mortgage comes up for renewal, when there's no penalty to break it. Where we can, we line up the second mortgage's term with your renewal date. Rolling it in means qualifying for the larger first mortgage, so we check your income, credit and equity now and again a few months before the term ends.
Can I get a second mortgage to pay off CRA debt?
Often, yes. Catching up on tax owed to the CRA is a common reason to take a second mortgage, along with paying off high-interest cards and loans. Many second mortgage lenders focus more on your equity than your credit score, so arrears or a few late payments don't automatically rule you out. They still want to see how the loan will be repaid, so bring your CRA statements and a clear picture of your other debts when we talk.
Today's rates
Our rates vs the banks'
We shop 50+ lenders, so the rate you're offered isn't limited to one bank's rate sheet. Updated Oct 8.
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Everyone's rate is different. What's yours?
Our job is to find you a competitive rate and terms that fit. Your rate qualification depends on certain factors, such as credit score and home equity, as per Canadian regulations. Get your details fast — there's no cost and no obligation.
- Current variable mortgage rate
- 3.70%
- Current prime rate
- 4.45%
| Term | Bank posted | Our rates | Action |
|---|---|---|---|
| 6 Months | 7.89% | 4.79% | Get this rate: 6 Months |
| 1 year fixed | 5.49% | 4.64% | Get this rate: 1 year fixed |
| 2 year fixed | 5.44% | 4.44% | Get this rate: 2 year fixed |
| 3 year fixed | 6.05% | 4.54% | Get this rate: 3 year fixed |
| 4 year fixed | 6.01% | 4.39% | Get this rate: 4 year fixed |
| 5 year fixed | 6.19% | 4.69% | Get this rate: 5 year fixed |
| 7 year fixed | 6.41% | 4.79% | Get this rate: 7 year fixed |
| 10 year fixed | 6.81% | 4.79% | Get this rate: 10 year fixed |
| 5 year variable | No bank rate | 3.70% | Get this rate: 5 year variable |
Bank posted rates are the big banks' posted rates published by the Bank of Canada (1, 3 and 5 years) and by Dominion Lending Centres (other terms). Some conditions may apply. Rates may vary from province to province. Rates subject to change without notice. Rates change often and depend on your down payment, credit and property; on approved credit (O.A.C.). E.&O.E.
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Contact info
Call, email or send us a message. We negotiate with over 50 lenders to find the right mortgage for you.
- Our location525 W 8th Ave #800, Vancouver, BC V5Z 1C6
- Phone number778-838-8005
- Email addressinfo@coastalblue.ca