How does a second mortgage work?
Updated: February 28, 2026CanadaFAQPrivate lending
Quick Summary
A second mortgage is registered behind your first mortgage so you can access additional equity without replacing the first loan.
A Second Mortgage lender is paid after the first mortgage lender, so the risk is higher and the pricing is usually higher.
Key concepts
- Position: first mortgage gets paid first; second mortgage is behind it.
- Combined LTV: lenders look at total debt on title compared to the property value.
- First mortgage restrictions: some first mortgages restrict adding a second charge.
When it can make sense
Second mortgages are often used for debt consolidation, urgent cash needs, or short-term bridge funding.
Main risk to plan for
Maturity pressure: if your plan is to refinance later, you need a realistic timeline and a backup plan in case the refinance takes longer than expected.