In Ontario, most second-mortgage lenders will lend up to about 80% of your home’s value — counting everything you already owe on your first mortgage. So the amount you can borrow is roughly 80% of your home’s value, minus your current mortgage balance. On a $900,000 home with $500,000 still owing, that’s up to about $220,000 of accessible equity, before fees.
That’s the short answer. The real number depends on your property, your lender, and your situation — here’s how it actually works, with an example you can follow.
The simple formula
Lenders look at your combined loan-to-value (CLTV) — every mortgage registered against the home, added together, divided by the home’s value. Most second-mortgage and private lenders cap CLTV around 80%. To estimate what’s available:
- Take your home’s current value and multiply by 0.80.
- Subtract the balance on your first mortgage (and any other registered debt).
- What’s left is roughly the room a second mortgage could use — before fees.
A worked example
Say your home is worth $900,000 and you owe $500,000 on your first mortgage:
- 80% of $900,000 = $720,000 (the ceiling across all mortgages)
- Minus your $500,000 first mortgage = $220,000 of potential room
- Your current loan-to-value is about 56%, so there’s meaningful equity to work with
You can run your own numbers in about ten seconds with the available-equity calculator — no form, no application.
What decides the actual amount you get
80% is the ceiling, not a guarantee. The amount a lender will actually advance depends on:
- The property — type, location and marketability. A standard home in the GTA supports more than a rural or unusual property.
- The first mortgage — its balance and standing.
- Income and how it’s documented — one factor among several, not the whole story.
- Credit — considered, but bruised credit doesn’t automatically close the door.
- The reason for borrowing and the exit plan — a second mortgage should be a short-term bridge with a clear way out.
Second mortgage or refinance — which frees up more?
Borrowing more isn’t the goal — the total cost is. If you have a low rate on your first mortgage, refinancing the whole thing to access equity can cost far more than a smaller second mortgage that leaves the low rate untouched. The only way to know is to compare both in real dollars. See compare your options and how the costs work before you decide.
Frequently asked questions
Can I get a second mortgage with bad credit in Ontario?
Often, yes. Second and private mortgages are largely equity-based, so bruised credit doesn’t automatically disqualify you — but it needs to be explained and the file structured properly, with a realistic exit plan.
How fast can a second mortgage close?
When there’s clear equity, a private second mortgage can often fund in a matter of days — which is why it’s frequently used to stop arrears or a power of sale. Timelines depend on the property, the payout and legal steps.
What does a second mortgage cost?
The rate is only part of it. Lender and broker fees, legal and appraisal costs all add up — and on a short term, fees can matter more than the rate. Always look at the total dollar cost, not just the headline rate.
Written and reviewed by Rajiv Verma, Mortgage Broker · Mortgage Architects, FSRA Brokerage Licence #12728. General information about mortgage options in Ontario — not legal, tax or insolvency advice, and not an offer of credit. Figures are illustrative; your options depend on your property, income, credit and a lender’s review.
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