Second Mortgages in Canada–what you need to know

Ver1.2 April 2025

Second Mortgages are unique products

Second mortgages can be a useful tool to unlock equity in your home and improve financial flexibility.  Along with home equity lines of credit (HELOCs), second mortgage have unique constraints that are worth bearing in mind before applying.  In general:

•  Lenders look for borrowers to maintain, at maximum, an 80% loan to value ratio after a second mortgage is approved.  This means that prior to applying for a second mortgage, your current mortgage + any heloc or additional loans secured with your home should not total more than 80% of your homes current value.  If this is the case, lenders will consider a second mortgage that takes your total borrowing against your home up to 80% of its value
• Many lenders minimum second mortgage value is $20,000
• Amortization periods are frequently fixed at 25 years and the maximum mortgage contract is 1 year
• interest rates are generally fixed rate

Apply Financial is your best source for competing terms on your second mortgage

While these unique constraints are generally industry wide, lenders compete on interest rate and other terms for your second mortgage at Apply.  Our structure remains the same – complete our single application that is tailored to your unique second mortgage situation and expect preliminary responses from competing lenders in 24 business hours.