📌 TL;DR – Second Mortgages in Canada (2025)
A second mortgage lets you borrow against your home’s equity without touching your first mortgage.
Use it for debt consolidation, home renovations, business funding, or even buying investment property.
Most Canadians can borrow up to 80–85% loan-to-value (LTV), often approved in 24–48 hours.
Interest rates are higher than traditional mortgages, but approvals are faster and often based on equity, not income.
Before calling your bank, read this blog to understand your options — it could save you thousands.
What Is a Second Mortgage in Canada?
A second mortgage lets you borrow against your home’s equity without breaking your current first mortgage. It’s an increasingly popular way for Canadians to unlock large amounts of capital for life’s biggest needs — from debt consolidation and home renovations to investment properties and business start-ups.
How Do Second Mortgages Work in Canada?
A second mortgage is secured by your home, but registered behind your first mortgage on title. This means the second lender takes more risk and charges slightly higher interest rates.
You can generally access up to 80%-90% loan-to-value (LTV) of your property — which means your current first mortgage balance + the second mortgage combined can’t exceed that threshold.
🔗 Financial Consumer Agency of Canada: Borrowing Against Your Home
Benefits of Second Mortgages
✔️ Access large sums quickly
✔️ Interest-only or blended payments
✔️ Keep your low-rate first mortgage intact
✔️ Faster approval for self-employed or low-credit clients
Common Uses of Second Mortgages in Canada
Second mortgages are a versatile tool, and Canadian homeowners often use them to:
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💳 Consolidate high-interest debts
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🔧 Renovate kitchens, basements, and bathrooms
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🏘 Buy rental or vacation properties
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🧾 Cover tax arrears or legal settlements
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🚗 Fund business expansions
📘 FCAC Guide: Dealing With Debt
What Are the Current Second Mortgage in Canada Rates?
As of 2025, private second mortgage rates in Canada range from 4.99% to 14.99%, depending on equity, credit score, and location. Fees are typically between 2% to 4% of the loan amount — and can be deducted from the loan proceeds. It is important to note that those are lender fees; there are still brokerage fees that usually match the lender fees as well.
🔗 Citadel Mortgages: Current Second Mortgage Rates
Second Mortgage vs HELOC: What’s the Difference?
While both allow you to use home equity, they operate very differently in terms of structure, flexibility, and repayment.
➡️ In Part 2 of this series, we break down the major differences between second mortgages and HELOCs (Home Equity Lines of Credit) — so you can make the right decision.
👉 Read Part 2: Second Mortgage vs HELOC in Canada – Which One Is Right for You?
Why Citadel Mortgages?
🏆 Award-winning Canadian mortgage brokerage
📊 Access to top private and B-lenders
📩 Fast closings — in as little as 48 hours
🧠 Expert advice from licensed mortgage agents
FAQs About Second Mortgage in Canada
Q: Can I get a second mortgage with bad credit?
A: Yes. Many private lenders focus on equity, not credit score.
Q: Do I have to refinance my current mortgage to get one?
A: No. That’s the benefit — you keep your current mortgage and add a second.
Q: How much can I borrow?
A: Typically up to 80–85% of your home’s appraised value, minus what you owe on your current mortgage.
Final Thoughts
A Second mortgage in Canada offer flexible access to home equity and are an effective financial solution for many Canadians — when used strategically.
Stay tuned for the full 4-part series on second mortgages in Canada:
✅ Understanding Second Mortgages in Canada (this post)
💰 How to Use Second Mortgages for Investment Properties in Canada
⚠️ Second Mortgage Pitfalls to Avoid in 2025
📞 Ready to unlock your equity?
👉 Speak with a Mortgage Expert at Citadel Mortgages
Getting a second mortgage in Canada can feel overwhelming — or it can be simple. At Citadel Mortgages, we specialize in second mortgages and typically secure approvals within 24 to 48 hours, as long as the required documents are provided. If you’re considering a second mortgage, don’t hesitate. Contact us today and let our experts guide you through the process with clarity and confidence.