Second Mortgage
Any loan in second lien position behind your existing mortgage.
How it works
A second mortgage is any loan secured by your home behind the first - both home equity loans and HELOCs are types of second mortgage. It sits in second-lien position, so it prices higher than the first mortgage. It lets you borrow equity without touching your existing first-mortgage rate.
Key things to know
- Combined loan-to-value usually caps near 85% (cash-out refinance at 80%).
- A second lien keeps your first mortgage; a cash-out refinance replaces it.
- Compare the rate type — fixed (home equity loan) vs variable (HELOC).
- Budget for closing costs (often lower or waived on HELOCs).
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Frequently Asked Questions
- What is the second mortgage?
- A second mortgage is any loan secured by your home behind the first - both home equity loans and HELOCs are types of second mortgage. It sits in second-lien position, so it prices higher than the first mortgage. It lets you borrow equity without touching your existing first-mortgage rate.
- Will it affect my first mortgage?
- Only a cash-out refinance replaces your first mortgage. A HELOC, home equity loan, or second mortgage sits behind it and leaves that rate alone.