Second Mortgage Ontario: December 2024 Lender Rates
Contrary to what most websites and financial advisors may say, the second mortgage can be a good financial tool to help you meet a financial goal, or solve a financial problem without refinancing your lower rate first mortgage.
So while getting a second mortgage in Ontario may seem negative, it may be the best, most cost effective financial solution to tie you over until your first mortgage renews and you can consolidate the second mortgage into the lower rate mortgage.
Sometimes in life we need to take one step back, to take three steps forward. At Altrua, we’ve got your back.
Second Mortgage Rates Ontario Compared
The following are second mortgage lenders available in Ontario and in some cases other Provinces where indicated. The second mortgage rates are compared along with other lender features.
| Second Mortgage Lender | Second Mortgage Rates |
|---|---|
| Buck Financial | 12.75% |
| Newhaven | 10.99% |
| River Rock | 9.99% |
| Fisgard | 11.49% |
| MCI | 11.49% |
| Magenta | 11% |
| Brightpath | 11% |
| Calvert | 12% |
| Altawest | 11.5% |
>> Connect with Altrua Financial for lower second mortgage rates with the best terms! <<
Benefits of Second Mortgage Lenders in Ontario
The benefits of a second mortgage will depend on your situation. For some, the benefit of the second mortgage is to access home equity to consolidate higher interest debt without breaking the lower rate first mortgage.
For example, if the primary, first mortgage is at 3.5% and has 3 years remaining, does it make sense to refinance and break this into a 6% mortgage? A second mortgage can leave the lower rate first mortgage rate without penalty while delivering the needed funds.
Another example of a second mortgage benefit is if the application to refinance for a bigger first mortgage no longer qualifies based on income or credit, given much higher mortgage rates in 2024. In this case, a private second mortgage lets the homeowner access the needed quality with a much easier qualification and fewer documents. The second mortgage can even be set up to postpone mortgage payments for a year.
Alternatives to Second Mortgages
The biggest alternative to the second mortgage is to refinance the existing first mortgage with an equity takeout. This means a new mortgage and rate replace the existing first mortgage. This can be a benefit if:
- The second mortgage will be much larger than the first mortgage, and the second mortgage rate will be higher.
- Refinancing involves savings on the first mortgage (for example, a better mortgage rate).
- There is an overall cost benefit to refinancing and taking out equity with a first mortgage vs adding a second mortgage.
Other second mortgage alternatives include paying down the existing debt, especially if the debt is relatively smaller and the second mortgage rates/ costs are comparable to what is already paid (often they are!). Finally, an un-secured credit line or loan may be more cost-efficient depending on the funds needed and credit score.
It’s essential that when working with your mortgage broker, options and alternatives are provided based on your situation.
Paying off a Second Mortgage
The second mortgage is typically not seen as a long term financing solution. Even the Home Equity Line of Credit (HELOC) rate is high, typically at ‘prime +’ (at the time of writing, 7.7% for a HELOC).
But whether it’s a private second mortgage or HELOC, it’s important to have a plan to pay off the second mortgage. This plan will often involve a refinance and consolidation with a lower rate first mortgage. Sometimes it’s harder to qualify due to bad credit or lower income, but the plan could involve increasing credit to help pay out the second mortgage,