Understanding Second and Third Mortgages
A second mortgage is a loan taken out against a property that already has a first mortgage, while a third mortgage is an additional loan secured against the same property. These mortgages allow homeowners to access the equity in their homes for various purposes, such as debt consolidation, renovations, or other significant expenses.
Although second and third mortgages typically come with higher interest rates than first mortgages, they can provide valuable financial flexibility. When combined with the competitive rates your Capital360 Mortgage Agent can negotiate, this option often makes financial sense.
Ask us about refinancing for:
- Consolidating debts
- Renovations and home improvements
- Starting a business
- Buying investment properties
- Freeing up cash for your business
- Children’s education
- Weddings
- Post-divorce equity payouts
- Paying overdue taxes
- Paying off bad debt or mortgage arrears
- Bringing mortgage arrears up to date
- Halting a power of sale
Canada’s best mortgage prepayment options
Even though rates for 2nd and 3rd mortgages are generally higher than standard mortgage rates, Capital 360 Mortgage can help you refinance with Canada’s best prepayment options.
Understanding private mortgages
Private 2nd and 3rd mortgages are one of Canada’s most common forms of private mortgage financing. They offer a flexible solution to consolidate debt, borrow money, or pay off loans—while keeping your long-term first mortgage in place. This is advantageous because first mortgages usually have lower interest rates, making second or third mortgages a smart way to access cash.
Another great benefit to 2nd and 3rd mortgages is how fast they can be put in place. Often these can be approved and funded within days.
Improving cash flow
Private mortgages can also help homeowners free up monthly cash flow. Even if the rates are higher than standard bank rates, refinancing allows for debt consolidation with far less interest than credit cards. What’s more, interest only debt servicing may also be available, freeing up usable cash for monthly expenses.
Private mortgage costs
As mentioned above, interest rates for private mortgages are typically higher than those for first mortgages. Lenders base approval on LTV (loan-to-value), your property’s location and the risk level of the loan.
Other associated costs with Private mortgages would be broker, lender fees, legal fees, appraisal fees and miscellaneous administrative fees.