Looking for Second Mortgage Rates in Ontario?

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If you’re a homeowner in Ontario and need access to extra funds—whether it’s for debt consolidation, home improvements, or major expenses—a second mortgage can be a smart way to use the equity in your home. But not all second mortgages are the same. The rates, terms, and even what kind of second mortgage you can get will depend on your credit, your current mortgage, and the lender you work with.

Let's go through how second mortgages work, what types are available in Ontario, and how to get the best second mortgage rates in 2025.

Different Types of Second Mortgages in Canada

A second mortgage is simply a loan that’s secured against the equity in your home—on top of your first mortgage. It’s called a “second” mortgage because it comes after your main mortgage in priority if the home is ever sold or foreclosed.

Now, if your first mortgage is with a major bank, and they say no to giving you a second mortgage, that doesn’t mean you're out of options. You still have access to a range of alternatives—but only through a licensed mortgage broker.

Here are your main options if a bank turns you down:

Second mortgage from a B lender: A lump-sum loan with flexible approval criteria.

HELOC from a B lender: A line of credit secured to your home, even if your first mortgage is with a different lender.

Home equity loan from a private lender: A fixed-term loan based on your equity, often with fewer income or credit requirements.

HELOC from a private lender: Less common than a private home equity loan, but still an option in certain cases.

Each of these products has its pros and cons, and the rates can vary depending on your credit score, how much equity you have, and your property location.

Best Second Mortgage Rates Ontario Canada 2025

So, what are the second mortgage rates in Ontario like in 2025?

Let’s break it down by lender type and product:

Home equity loan rates start around 6.99%: These loans are typically fixed-rate with a 1-2 year term

B lender HELOCs rates start at 7.49%: May be fixed or variable, depending on the lender and your qualifications

Private lender HELOC rates start at 9.44%: Offered in limited areas, and rates vary based on risk and location

If you're trying to choose the right option, a broker can help you compare these side by side based on your financial situation and goals.

Are Second Mortgage Rates Fixed or Variable?

Second mortgage rates in Ontario can be either fixed or variable, depending on the lender and the loan type:

Home equity loans: These are usually fixed-rate, meaning your interest and monthly payment stay the same for the entire loan term.

HELOCs from B lenders: These can be either fixed or variable. Variable rates move with the prime rate, while fixed rates are locked in.

Private HELOCs: These are less common and often fixed-rate, though the terms may vary from lender to lender.

If you’re looking for predictability and stable payments, fixed rates are a safe choice. If you’re confident that rates might drop or you plan to pay off your loan quickly, a variable rate might work in your favour. Again, a mortgage broker can help you weigh the pros and cons based on your comfort level.

How to Get the Best Second Mortgage Rates

Getting the best possible second mortgage rate in Ontario isn’t just about finding the lowest number online—it’s about finding the right lender and product for your unique situation. Here’s how to do it:

Work with a reputable mortgage broker

Brokers have access to a wide network of lenders, including banks, B lenders, and private lenders. They can assess your situation and recommend the product that fits you best—whether it’s a HELOC, home equity loan, or something in between.

Understand your credit score and equity

Your credit score and your loan-to-value ratio (how much you owe compared to your home’s value) are two key factors that influence the rate you’ll be offered.

Gather your documents early

Being prepared can help speed up the process and get you better offers. Some of the typical documents you’ll need include:

Mortgage statement

Property tax bill

Proof of income (bank statements, pay stubs, or tax filings)

Broker to arrange an appraisal

Your broker will schedule an appraisal with a licensed appraiser to confirm your home’s market value. This is a required step, and it protects you by ensuring you're not borrowing more than your home is worth.

Minimum Credit Score for a Second Mortgage

Unlike banks, which usually require a credit score of 680 or higher, B lenders and private lenders have more flexible criteria:

B Lenders: Will consider credit scores as low as 550, especially if you have strong equity and income

Private Lenders: Often don’t have a minimum credit score at all. Instead, they focus on your home’s value and how much you want to borrow

If your credit is bruised or you’ve had past issues like collections or missed payments, a second mortgage from a B lender or private lender may still be possible—as long as you have enough equity in your home.

How Much Can You Borrow with a Second Mortgage?

The amount you can borrow with a second mortgage depends on the total equity in your home and your loan-to-value ratio (LTV).

Most lenders in Ontario will allow second mortgages up to:

75% to 80% of your home’s appraised value (including your existing first mortgage)

Calculation example:

Home is worth $600,000

You owe $350,000 on your first mortgage

A second lender may allow borrowing up to $480,000 (80% of $600,000)

That means you could borrow up to $130,000 as a second mortgage

Keep in mind, borrowing at a lower LTV (like 65% or below) can help you qualify for better interest rates.

Do You Need an Appraisal for a Second Mortgage?

Yes—an appraisal is a required part of the second mortgage process, and for good reasons:

Confirm the current market value of your home

Help the lender determine how much they can lend you

Protect you, the borrower, from overpaying or borrowing too much

Your broker will arrange an appraisal with an approved appraiser. The report usually takes a few days to complete and is a critical step before your loan is finalized.

How Long Does It Take to Get a Second Mortgage?

One of the advantages of second mortgages—especially from B lenders and private lenders—is how fast they can be arranged.

Here’s a typical timeline:

Day 1–2: Apply through a mortgage broker and have an initial consultation

Day 3–4: Your broker orders an appraisal and gathers your documents

Day 5–7: Broker waits for the appraisal and submit a full package to lenders

Day 7–10: Review approval with broker and sign documents

Day 11–14: A lawyer completes the closing process and releases the funds

So, in most cases, you can expect the entire process to take around 2 weeks. In urgent situations, private lenders can sometimes expedite the process.

Working with a broker helps keep the process moving quickly because they know exactly which lenders can move fast based on your timeline.

Common Reasons to Get a Second Mortgage

Second mortgages can be a smart financial tool when used carefully. Here are some of the most common (and practical) reasons homeowners in Ontario use them:

Debt consolidation: Pay off high-interest credit cards or loans and simplify payments

Home renovations: Upgrade your kitchen, roof, or bathroom and increase your home’s value

Emergency expenses: Unexpected costs like medical bills, car repairs, or legal fees

Investment opportunities: Start a business, invest in real estate, or fund education

Just make sure you have a clear repayment plan. Many second mortgages are interest-only or short-term loans (1 to 2 years), so it’s important to know how you’ll pay it off—whether through refinancing, selling, or lump-sum payments.

Get the Best Second Mortgage Rates

A second mortgage can be a powerful way to access the equity in your home without touching your first mortgage. And in 2025, homeowners in Ontario have more options than ever.

Here’s what you need to remember:

Work with a broker: They’ll connect you with the right lenders and help you save time and money.

Know your credit and equity: These are the two biggest factors in what rate you’ll qualify for.

Expect an appraisal: This is a must to confirm your home’s value.

Understand the costs: Closing fees, legal costs, and interest rates all matter—not just the rate on paper.

If you’re not sure where to start, reach out to a licensed mortgage broker. They’ll walk you through the options, explain everything clearly, and help you find the second mortgage that makes the most sense for your goals.