Second Mortgages - Home Equity Loans

A second mortgage is a secured loan that coincides with, and is in addition to, a first mortgage on the same property.

The original loan taken out on a home or property is considered the first mortgage. Any subsequent loan taken out which uses the same home as collateral is referred to as the second mortgage.

Second mortgages are often also called home equity loans. Typically a second mortgage amount can be for no more than the amount of equity that your home has (although some lenders will offer 110% equity loans or something similar).


Debt consolidation is probably the top reason why people get a second mortgage. Credit cards and other common debts carry huge interest charges and it can easily overwhelm a person. So they may take cash out of their home's equity to pay off all that high-interest debt and replace it with an easier-to-pay debt that carries a much lower interest rate and a long payback term.