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Combined loan-to-value
CLTV = (first mortgage + second mortgage) ÷ home value. Many lenders cap it at 80%–90%. On a $400,000 home with $200,000 owed, 85% CLTV leaves room for $140,000.
| Home value | First mortgage | Room at 80% | Room at 85% | Room at 90% |
|---|---|---|---|---|
| $300,000 | $150,000 | $90,000 | $105,000 | $120,000 |
| $400,000 | $200,000 | $120,000 | $140,000 | $160,000 |
| $500,000 | $300,000 | $100,000 | $125,000 | $150,000 |
| $600,000 | $450,000 | $30,000 | $60,000 | $90,000 |
Payment on a second mortgage (example 8.25%)
| Amount | 10 years | 15 years | 20 years |
|---|---|---|---|
| $25,000 | $306.63 | $242.54 | $213.02 |
| $50,000 | $613.26 | $485.07 | $426.03 |
| $75,000 | $919.89 | $727.61 | $639.05 |
| $100,000 | $1,226.53 | $970.14 | $852.07 |
Second mortgage, HELOC or cash-out refinance?
A fixed second mortgage keeps your first-mortgage rate and gives a fixed payment. A HELOC is a variable line you draw as needed. A cash-out refinance replaces the first mortgage, which only makes sense if the new rate is not much higher than your current one.
Your home secures a second mortgage; missed payments can lead to foreclosure.
Example rates are for comparison only, not offers or current quotes. Your rate depends on credit, loan-to-value and lender.
Sources and assumptions
- CLTV = all loans secured by the home ÷ appraised value.
- CFPB: what is a second mortgage
Related
Frequently asked questions
How much can I borrow on a second mortgage?
Usually up to 80%–90% of the home value minus your first mortgage balance, subject to credit and income.
Is a second mortgage the same as a home equity loan?
A home equity loan is the most common kind of second mortgage. A HELOC in second position is also a second mortgage.