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Best Second Mortgage Rates in Canada

Finding the best credit solutions in today’s high-interest market can be challenging. However, many options are available for homeowners, including a second mortgage. Here we look at this loan option and second mortgage rates in Canada to help you understand how this home equity loan option works.


Understanding how to use the equity in your home can be difficult depending on your situation. Download this eBook now to make the process easier and to have a better understanding of the options available to you today.

What is a Second Mortgage?

When you have equity in your home, you can use your home as collateral to take out a loan known as a second mortgage. Also known as a home equity loan, a second mortgage is available at lower interest rates than unsecured credit, such as credit cards, because your home is used as collateral.  

Types of Second Mortgages

There are two types of second mortgages in Canada:


A home equity line of credit or HELOC is a revolving loan with a credit limit based on your home equity. They have a variable rate that rises and falls with the prime rate. The HELOC allows you to access money from your choice of lenders, and the loan is provided as a line of credit with a credit limit. As a result, you only pay interest on the amount you use and make payments on that amount. 

Under this type of second mortgage, you can also get what is known as a readvanceable mortgage, which combines your HELOC and mortgage. The HELOC portion’s credit limit increases as your mortgage portion shrinks. The readvanceable HELOC is only available through your mortgage lender.

2. Home Equity Loan/Private Mortgages

In this case, you are provided a lump sum based on the equity available in your home when you apply for the loan. The amount available does not vary and you can choose either a fixed or variable interest rate. You can approach your choice of lenders, including private lenders offering less strict lending requirements, but much higher interest rates.

The Differences Between First & Second Mortgages

A first mortgage is the mortgage you get when you purchase your home. A second mortgage is a loan taken out using your home as collateral.

How Does a Second Mortgage Work?

A second mortgage is what is known as a “secured loan,” as the lender can take your home should you fail to make payments. The equity in your home is the most critical factor in second mortgages, as the equity determines how much money you can access and how much the lender gets should you default. The lender uses the current market value of your home in hand with your mortgage balance to determine how much money they are willing to lend you. As a result, a home appraisal is required to confirm how much your home is worth.

The lender usually charges you for the appraisal and then uses that amount to determine the loan amount based on the maximum limit available in Canada. This is usually no more than 80% unless you apply with a private lender. These loans can go as high as 95%.  The amount is calculated based on 80% of the appraised home value less the money owed on your first mortgage. You then pay two separate payments for your first and second mortgage based on your payment schedule. Should you miss payments and default on your second mortgage, the lender can take your home, even if you are up to date on your first mortgage payments.

How to Get a Second Mortgage?

You can submit an application like you would for a first mortgage providing your credit and financial information so the lender can assess your credit. The lender will also perform a home appraisal to determine the current value of your home. From there, they determine how much they are willing to lend you based on your credit score and the type of second mortgage you are applying for.


  • Second Mortgages Approved Up To 90% Of Your Home Value
  • Approved Same Day
  • Second Mortgage Approvals For All Income & Credit Types
  • Fast Funding In As Little As 2-3 Business Days
  • Limited Time We Cover The Appraisal Once Your Second Mortgage Closes!
  • Your Approved Based On Equity Not Income Or Credit!

How Much Can I Borrow on a Second Mortgage?

You can borrow from 65% to 80% of your home’s appraised value minus your current mortgage balance, depending on your credit rating, the type of second mortgage, your home equity available, and the lender. A private mortgage can be as high as 95%.

Refinancing vs. a Second Mortgage

Refinancing is similar to a second mortgage, as you can access up to 80% of your home’s value. However, refinancing impacts your current mortgage as the loan is provided by renegotiating the conditions and increasing the amount owed. Refinancing also comes with penalties for breaking your existing mortgage agreement, whereas a second mortgage is a separate agreement without penalties.  As a result, refinancing tends to be the least appealing choice unless current interest rates are equal to or lower than your existing mortgage and will save you more than what you’ll pay in penalties.

HELOC vs. Second Mortgage

A HELOC allows you to draw money from a credit line, while a second mortgage pays you a lump sum with fixed-rate payments on that sum each month. You also need a good credit score for a HELOC, whereas a second mortgage is easier to get as they have higher interest rates and are not as strict with their lending policies.


Our Featured second mortgage Rates

Second Mortgage Heloc Rates


( starts at 5.99% up to 80% ltv of home)

SImple Second Mortgage Rates


(starts at 8.99% up to 80% ltv of home)

We'll help you find a rate and term that fits your needs.

Use Our Second Mortgage Calculator Today!

Calculate Your Home Equity, Interest Rate, and Monthly Payments Below FREE, with No Obligations with our Second Mortgage Calculator Now!

Secure | No Obligation | Get Approved Today

How much can you get?

These Documents will be required in order to close your second mortgage:

  • Current Mortgage Information Statement -Must be dated the same month as your application form, if you do not have one you can contact your mortgage lender and request one to be sent to you by email.
  • Most recent property tax statement -If you do not have this, then you can get the most updated statement from your local city hall.
  • Most recent NOA may be requested to show no income tax owing – If income tax owing it will need to be paid out from the new second mortgage upon closing.
  • Other documents may be required; our mortgage agents will help you if any additional documents are needed for your second mortgage needs.

Whether you have good or bad credit, a Second Mortgage can help get you money for whatever you need, and the process is usually as little as 2-3 business days. Due to the increased risk for the lenders, because the second mortgage is in the second position, the interest rates for second mortgages are typically more than those for first mortgages and will have fees as part of the mortgage.

The term “second mortgage” is used because the loan is second in priority in case of default. This means that if a borrower defaults, the first mortgage will be paid off before the second mortgage.

We have many private mortgage lenders who have helped our clients receive second mortgages regardless of income or credit, based on the equity in their property. See the difference for yourself and get approved today with our second mortgage solution!

  • Consolidate Debt
  • Renovate Your Home
  • Invest In Your Business
  • Pay Off A Consumer Proposal
  • Pay Mortgage Arrears
  • Purchase Investments including Real Estate
  • Pay for wedding expenses
  • Pay for education
  • Cover medical expenses
  • Pay CRA tax arrears
  • Pay property tax arrears
  • Take a family vacation
  • Purchase a car
  • Get out of high-interest loans
  • Invest In RRSP or RESP
  • Pay off payday loans
  • Pay Off Judgments, Garnishments
  • Finance whatever your specific needs may be

Frequently Asked Questions on Mortgage Refinance

It does cause a drop when you apply, but as long as you make your payments on time, your credit score will bounce back.

It depends on the lender. The best second mortgage rates in Canada are HELOCS, followed by home equity loans and then private loans.

Typically, processing and approving a second mortgage can take at least 30 days.

You can get a second mortgage with bad credit by paying higher interest rates or having someone co-sign the loan. You can also consider a private lender, but will have to pay more than double the interest rates in most cases.

Even if you are up to date on your first mortgage payments, the lender can start foreclosure proceedings to take your home if you fail to make payments on your second mortgage.

You require at least 20% to purchase a second home in Canada.

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