If you’re a homeowner in Canada, you may have considered utilizing a second mortgage lender. Essentially, a second mortgage is a loan secured by your home, similar to a first mortgage offered by a traditional bank. Opting for a second mortgage could be a suitable solution if you need to access additional equity in your home but prefer to maintain your existing first mortgage, which may have a favorable interest rate or significant penalty for early termination.
With this option, your current mortgage will remain unchanged and hold first position on title. The second mortgage lender will then provide additional funds and register a mortgage in second position on title. As the lender holding first position is always paid first, the second lender is taking on greater risk, which is why the mortgage rate may be higher. An experienced mortgage expert can help you assess whether a second mortgage is a better financial option than refinancing your current mortgage.
If you have any queries or concerns, don’t hesitate to reach out to us. We’d be happy to discuss your options with you.