How a Second Mortgage Works

A second mortgage lets you borrow against the equity you have built while leaving your first mortgage intact. Because the second lender stands behind the first in a foreclosure, rates run higher and the amount you can borrow is capped by your combined loan-to-value. This second mortgage calculator models the whole position at once.

The CLTV Ceiling

Most lenders stop at 80–90% combined LTV. On a $400,000 home with a $250,000 first mortgage, the 80% ceiling leaves roughly $70,000 of theoretical second-loan capacity. The calculator's CLTV figure shows exactly how close a proposed second loan brings you to that ceiling.

Second Mortgage vs. HELOC

A fixed-rate second mortgage gives predictable payments but higher starting rates; a HELOC offers variable-rate flexibility and interest-only options during the draw period. Both add a monthly obligation to your existing first-mortgage payment — the combined-payment row in this calculator is what your full housing cash flow really looks like.