Looking for Second Mortgage Options in Ontario?

360Lending is an award-winning mortgage brokerage based in Richmond Hill, Ontario. Over 2,000 homeowners in Ontario have given us 5-star reviews and we have an A+ rating from the Better Business Bureau.

We help homeowners get the lowest rates for home equity loans, home equity lines of credit, refinancing, and other mortgage products.

To get approved for a second mortgage, click here to schedule a call with our team.

If you’re a homeowner in Ontario thinking about tapping into your home’s value without refinancing your first mortgage, a second mortgage can be a powerful option. It’s a popular way to access money for debt consolidation, home renovations, education costs, or even emergency expenses. But the big question most people have is: How much can you actually borrow with a second mortgage?

How Much Can You Borrow With a Second Mortgage?

In Ontario, most lenders will allow you to borrow up to 80% of your home’s appraised value, minus what you still owe on your first mortgage. This percentage is known as the loan-to-value ratio (LTV).

(Home Value × 80%) – Current Mortgage Balance = Maximum Borrowing Amount

If your home is worth $800,000 and your existing mortgage balance is $500,000,

80% of your home’s value is $640,000,

That means you may be able to borrow up to $140,000 as a second mortgage ($640,000 - $500,000).

This limit protects both you and the lender by ensuring you don’t borrow more than your home can support.

Factors That Affect How Much You Can Borrow

Not every situation is the same. Lenders look at several factors to decide how much they’re willing to lend you.

1. Loan-to-Value (LTV) Ratio

The most common limit for second mortgages in Ontario is 80% LTV. However, some private lenders might consider slightly higher LTVs depending on the property and your overall profile.

2. Marketability of the Property

Lenders assess the property type and location.

Urban homes, single-family detached homes, and condos in major cities are considered more marketable and may qualify for higher borrowing limits.

Rural properties, cottages, and multi-unit rentals may see stricter lending limits or higher interest rates.

3. Credit and Income

Your credit score and income stability matter.

Strong credit and stable income often allow you to qualify with institutional lenders (such as banks and trust companies) who typically offer better rates.

If your credit is bruised or your income is irregular, you may need to work with a private lender who focuses more on the equity in your home rather than your credit profile.

Second Mortgage Interest Rates in Ontario

Second mortgage rates are generally higher than first mortgage rates, since lenders take on more risk. But they’re often much lower than the rates you’re probably paying on high-interest debt like credit cards or unsecured loans.

Here’s a snapshot of typical rates as of 2025 in Ontario:

Home Equity Loans (Second Mortgages): starting at 6.99%

Home Equity Lines of Credit (HELOCs): starting at 7.49%

Your exact rate will depend on your property, location, credit, income, and lender type. Private lenders may charge even higher rates if your credit or income is weak, but they also offer greater flexibility.

How to Get a Second Mortgage in Ontario

Getting a second mortgage isn’t as complicated as it sounds, but it’s not something you should do alone. Always consult an experienced mortgage broker who can guide you to the right lenders and product for your situation. A broker works on your behalf, not the lender’s, and can help you save thousands of dollars by finding the best deal.

Here’s what the process generally looks like:

Work with a reputable mortgage broker: They’ll ask about your goals and review your current mortgage details.

Determine how much equity you have: Your broker will arrange for a home appraisal with an approved appraiser for the lender to confirm your property’s current market value.

Complete your application: You’ll provide documents like income verification, credit reports, and property details.

Get matched to the right lender: Your broker will shop around for lenders that fit your profile.

Review your offers: Your broker will help you understand the terms, interest rates, fees, and repayment schedule.

Close the deal: Once you accept the offer, documents are signed, and the funds are advanced to you.

This entire process is usually completed in around 2 weeks but can be expedited in certain situations.

Getting a Second Mortgage to Pay Off Debt

One of the most common—and smartest—reasons homeowners get a second mortgage is to consolidate high-interest debt.

Here’s why it works:

Many Canadians carry large balances on credit cards, lines of credit, payday loans, or car loans with interest rates of 19% or more.

Replacing those debts with a second mortgage at 6.99%–11.99% can reduce your monthly interest costs by up to 50%.

Lower monthly payments can free up your cash flow and help you get back on track financially.

There’s another hidden benefit too. When your debts are paid off, your credit utilization ratio drops. This ratio makes up 35% of your credit score. Many homeowners see a noticeable credit score improvement within 60 to 90 days of paying off debts with a second mortgage.

Can You Get a Second Mortgage With Bad Credit?

The good news is yes—you can still get a second mortgage with bad credit. However, the type of lender and the cost of borrowing will depend on your situation.

✔ B Lenders

If you’re applying through a B lender, your income and credit score will need to meet certain requirements. Most institutional lenders require:

A minimum credit score of around 550

Strong, verifiable income

A reasonable debt-to-income ratio

If you don’t meet these standards, they may decline your application or offer you a very limited borrowing amount.

✔ Private Lenders

Private lenders are far more flexible. They are primarily focused on the equity in your home and the loan-to-value (LTV), not your credit score.

If you have at least 20% equity in your home and a manageable debt level, many private lenders will approve you, even with bruised or poor credit.

In Ontario’s private lending market, second mortgage approval can happen even with credit scores below 550—or no score at all.

The trade-off? Private lender rates are slightly higher, and closing costs may apply. But for many homeowners, it’s a valuable tool to regain control of their finances, especially if traditional lenders have turned them down.

Can You Get a Second Mortgage Without Income?

This is another common question, especially for self-employed individuals, retirees, or those in between jobs.

❌ Institutional Lenders

Banks and credit unions in Ontario will almost always require proof of stable income such as:

Employment income

Pension income

Business revenue (with supporting documents)

Without income, you will not be able to qualify with institutional lenders.

✔ Private Lenders (Home Equity Loans)

Private lenders offer a different path. They focus almost entirely on the equity in your home.

As long as the loan amount requested keeps your total loan-to-value (including your first mortgage) below 80%, many private lenders won’t ask for income verification.

This type of second mortgage is commonly referred to as a home equity loan.

Private lenders understand that some homeowners have substantial property value but limited traditional income sources. As long as you can show a realistic plan for repayment (such as selling the property down the road or refinancing later), they will often proceed.

Explore Your Second Mortgage Options in Ontario

A second mortgage can be a smart financial tool if you use it wisely. It allows you to access your home’s equity without breaking your existing first mortgage. You can:

Consolidate debt

Pay for renovations or tuition

Cover emergency expenses

Invest in business opportunities

But second mortgages come with responsibility. Rates are higher than first mortgages, and you must keep up with payments or risk foreclosure.

That’s why working with a licensed mortgage broker is essential. A broker will:

Assess your full financial picture

Explain your lender options

Help you compare offers

Protect you from predatory lending terms

Ensure you get a deal that fits your needs and goals

In Ontario’s market, there are many second mortgage solutions available—even for borrowers with poor credit or limited income. The key is knowing your options and working with the right professionals to guide you.