Vaughan, Ontario · FSRA #13737

Second mortgage calculator —
see how much equity
you can access.

Q: Do I pay interest-only or principal too?

Many private second mortgages are interest-only for a short term (1-2 years), which keeps the payment low while you fix what you came for — then you exit by refinancing both mortgages into one. Institutional seconds may be amortized. The calculator shows both so you can compare the monthly cost.

Enter your home value and first mortgage balance. The calculator applies your combined LTV cap and shows the interest-only payment, amortized payment, and fees — instantly.

Read the second mortgage guide

FSRA licensed #13737
100+ lender partners
4.9 ★ Google rating (256 reviews)
15,000+ Canadians helped

Second mortgage calculator.

Fact-checked by Surrayya Afzal, Principal Broker, FSRA #M14001433·Last reviewed October 2026

The short answer

A second mortgage lets you borrow against your home equity without touching your first mortgage. Both loans together are usually capped at about 80–85% of your home's value.

Your numbers

Home value (appraised)

$900k

First mortgage balance

$500k

Max combined LTV

80%

80% is the usual cap for banks and B-lenders (often as a HELOC or refinance); private second-mortgage lenders may go to 85% or higher.

Second mortgage rate

9.99%

Lender + broker fees (illustrative)

Interest-only term

12 months

Amortization (if amortized)

25 yr

Estimated second mortgage available

$220,000

Takes you to ~80% combined LTV

Monthly payment options

Interest-only payment$1,832

Amortized (25 yr)$1,966

Total lender + broker fees$4,400

Net advance after fees$215,600

Interest-only term cost of borrowing$26,378

Estimated interest-only APR including fees12.12%

Combined loan-to-value80%

Like your number? Let’s make it real.

No credit check to start. One advisor compares 100+ lenders for you.

Mortgage Squad Advisors · FSRA #13737 · Licensed in Ontario only.

Get pre-approved

(905) 553-8550

Save these numbers as a PDF.

Your inputs and results in one page you can keep.

Read the full explanationThe rules behind the numbers, with worked examples.

When a second mortgage is the right tool

A second mortgage sits behind your existing first and lets you tap equity without touching that first mortgage — valuable when your first carries a low rate you don’t want to break, or when a clean refinance isn’t possible because of credit, income documentation, or timing.

How much you can borrow — a worked example

Lenders cap your combined loan-to-value (first + second). On a $900,000 home with a $500,000 first mortgage: at an 80% cap, the ceiling is $720,000, so the available second is $720,000 − $500,000 = $220,000. Push to an 85% private cap and the ceiling rises to $765,000, lifting the available second to $265,000. The higher the LTV a lender allows, the more you can draw — but the higher the risk, so the rate rises with it. Adjust the LTV slider above to see conservative versus aggressive scenarios for your own numbers.

Why the rate is higher — and interest-only

Because the second lender is repaid only after the first if anything goes wrong, it takes more risk and charges more. Institutional seconds and HELOCs price lowest; a private second typically runs ~8-13% (illustrative, October 2026) plus disclosed lender and broker fees, pricing for position and speed rather than your credit score. Many private seconds are interest-only for a short 1-2 year term, which keeps the monthly payment low while you fix what you came to fix — the calculator shows both the interest-only and the amortized payment so you can compare.

Use it with an exit in mind

The key to using a second well is the exit. It’s best as a short bridge — consolidate high-interest debt, fund a renovation that adds value, or cover a defined gap — with a plan to refinance both mortgages into a single lower-cost loan once the reason for the second is resolved. We compare a second against a HELOC, a full refinance, and debt consolidation, disclose every fee in writing, and map the exit from day one — see how the private side works on our second mortgage page.

How to use this calculator

Enter your home valueUse a realistic current market value — or a recent appraisal. A higher value means a higher LTV ceiling, which affects how much you can borrow behind your first mortgage.
Enter your first mortgage balanceAdd the balance you still owe on your first mortgage. The second sits in second position — lenders cap your combined debt (first + second) to a percentage of the home's value.
Review your equity and payment — then talk to usThe calculator shows available equity, the interest-only and amortized monthly payment, fees, and an illustrative APR. Once you have your estimate, our advisors can match you to the right lender across 100+ options.

How this is calculated

Fees default to an illustrative 2%, deducted from the advance. APR assumes monthly interest-only payments and full principal repayment at the end of the selected term, with no additional fees or renewal. Your exact cost of borrowing is disclosed in writing before you sign. Amortized payments use semi-annual compounding; monthly compounding would cost more. Available = home value × LTV cap − first mortgage balance. The default 9.99% rate is an illustrative assumption, not a quote. Private second mortgages carry lender + broker fees (disclosed in writing) on top of the rate. Approval depends on equity, exit plan, and property.

FAQ

Common questions

Don’t see yours? Ask Maya.

How much can I borrow on a second mortgage?

Most second mortgages take your combined loan-to-value (first mortgage + second) up to 80% with A/B lenders, and some private lenders go to 85% or higher. Your available amount is the home value times the LTV cap, minus your existing first mortgage. Adjust the LTV slider above to see conservative vs. aggressive scenarios.

What rate does a second mortgage charge?

Higher than a first, because the second lender is repaid only after the first if anything goes wrong (FCAC: borrowing against home equity). Institutional seconds and HELOCs price lowest; private second mortgages typically run higher (as an illustrative range in October 2026, often ~8-13%) plus lender and broker fees, all disclosed in writing. The rate reflects position and risk, not just your credit. The calculator's default rate is an assumption; enter the rate you've been quoted.

Second mortgage, HELOC, or refinance — which is cheaper?

If your first mortgage rate is low and you don't want to break it, a second mortgage or HELOC lets you keep it and borrow on top. If you can refinance the whole thing at a good rate, a refinance is usually cheapest. Bruised credit or speed often points to a private second. We compare all three on your file.

Do I pay interest-only or principal too?

Many private second mortgages are interest-only for a short term (1-2 years), which keeps the payment low while you fix what you came for — then you exit by refinancing both mortgages into one. Institutional seconds may be amortized. The calculator shows both so you can compare the monthly cost.

Is a second mortgage safe?

It's a real obligation secured against your home, so it should be used deliberately — for debt consolidation, a renovation that adds value, or to bridge a defined gap with a clear exit. We build the exit (usually a refinance to A or B pricing) into the plan from day one rather than leaving you on a high private rate.

What is the exit strategy for a second mortgage?

The key to using a second mortgage effectively is building the exit into the plan from day one. Most borrowers plan to refinance both the first and second into a single A or B-tier mortgage once the trigger is resolved — whether that is improved credit, a completed renovation, or consolidated debt. We map the exit with you before funding so you are never left on a high private rate indefinitely.

Do you charge a fee to arrange a second mortgage?

Our broker fee on private second mortgages is always disclosed in writing before you commit, and no fee is deducted without your written consent. On institutional second mortgages, the lender pays us at closing and there is no charge to you. Every cost — lender fee, broker fee, legal fee — is laid out clearly so you know your true cost of borrowing.

Words to know

Second mortgage Loan-to-value Home equity

Related calculators & guides

HELOC vs second mortgage Second mortgage guide HELOC borrowing power Debt consolidation Private mortgage rates

See today’s rates behind these numbers: the Canadian Lending Snapshot

Want a real rate for these numbers?

Bring us a written offer from a big bank. We’ll try to beat it. If we can’t, we pay you $500. Conditions apply. See the conditions