Second Mortgage Calculator

Calculate monthly payments and total costs for a second mortgage or home equity loan. See the combined impact on your monthly housing payments.

Second Mortgage Details

$
%
yrs
$

Your current monthly payment

Enter your second mortgage details and click "Calculate" to see your payments.

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Pro Tip

Before taking a second mortgage, compare it to a cash-out refinance. If current rates are lower than your first mortgage rate, refinancing the entire amount into one loan could save you money and simplify your payments.

Try the Cash-Out Refinance Calculator →

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Understanding Second Mortgages

A second mortgage is a loan taken out against your home while you still have a primary mortgage. It uses your home equity as collateral and is subordinate to your first mortgage, meaning the primary lender gets paid first if you default. Because of this added risk, second mortgages typically carry higher interest rates.

There are two main types of second mortgages: home equity loans (fixed rate, lump sum) and home equity lines of credit (HELOCs, variable rate, revolving credit). Home equity loans provide a one-time disbursement with predictable fixed payments, while HELOCs offer flexible borrowing similar to a credit card.

Second mortgages are commonly used for home improvements, debt consolidation, education expenses, or major purchases. The interest may be tax-deductible if the funds are used for home improvements, though you should consult a tax professional for your specific situation.

Before taking a second mortgage, consider whether the total combined payments are affordable and whether you could use alternative financing options. Remember that your home is at risk if you cannot make payments on either mortgage.

Monthly Payment Formula

M = P × [r(1+r)n] / [(1+r)n − 1]

Where:

M = Monthly payment

P = Second mortgage loan amount

r = Monthly interest rate (annual rate / 12)

n = Total number of payments (years x 12)

Example

$50,000 second mortgage at 8.5% for 15 years:

  • • Monthly rate: 8.5% / 12 = 0.7083%
  • • Number of payments: 15 x 12 = 180
  • • Monthly payment: $492.39
  • • Total interest over 15 years: $38,630
  • • Total cost: $88,630

Frequently Asked Questions

What is the difference between a second mortgage and a HELOC?
A second mortgage (home equity loan) provides a lump sum with fixed rate and payments. A HELOC is a revolving line of credit with a variable rate. Both use your home equity as collateral.
How much can I borrow with a second mortgage?
Most lenders allow you to borrow up to 80-85% of your home's value minus your first mortgage balance. For example, if your home is worth $400,000 and you owe $250,000, you might borrow up to $70,000-$90,000.
Are second mortgage rates higher than first mortgage rates?
Yes, second mortgage rates are typically 1-3% higher than first mortgage rates because the second lender takes on more risk. If you default, the first mortgage gets paid before the second.
Is second mortgage interest tax-deductible?
Second mortgage interest may be deductible if the loan proceeds are used to buy, build, or substantially improve your home. Consult a tax professional for guidance based on current tax law and your specific situation.