Second Mortgage Calculator
Calculate fixed-rate second mortgage (home equity loan) payments, total interest, and combined loan-to-value ratio. See if you qualify for typical 2026 lender CLTV limits.
Loan Summary
What Is a Second Mortgage?
A second mortgage is a fixed-amount, fixed-rate loan that uses your home as collateral while leaving your original mortgage in place. Also called a home equity loan, it's repaid in equal monthly payments over a set term — typically 5 to 30 years. Because it sits behind the first mortgage in foreclosure priority, second mortgages carry interest rates 1-3 percentage points higher than first mortgages. The lender places a second lien on your property (source: Consumer Financial Protection Bureau, cfpb.gov).
2026 CLTV Limits and Lender Guidelines
Most lenders cap combined loan-to-value (CLTV) at 80% to 85%, with some going up to 90% for top-tier credit. Combined LTV equals (first mortgage balance + second mortgage amount) divided by home value. On a $500,000 home with $280,000 first mortgage, an 85% CLTV cap means you can take a second mortgage up to $145,000. Lenders also require minimum credit scores around 660-680, debt-to-income ratios under 43%, and at least 12 months of clean payment history on the first mortgage.
Second Mortgage vs HELOC vs Cash-Out Refinance
A second mortgage gives you a lump sum at a fixed rate — predictable payments. A HELOC is a revolving line at a variable rate — flexible but rate risk. A cash-out refinance replaces your first mortgage at potentially a higher rate but consolidates the debt. Second mortgages win when first-mortgage rates are much lower than current market (refi would mean trading a 3% rate for 7%) and you want fixed payments. HELOCs win for ongoing access to funds. Cash-out refi wins when current rates are equal to or below your existing rate.
Tax Treatment of Second Mortgage Interest
Under current law, interest on a second mortgage is deductible on Schedule A only if used to "buy, build, or substantially improve" the home securing the loan, and only if total mortgage debt stays under $750,000 ($375,000 married filing separately). Using a second mortgage for debt consolidation or other purposes makes the interest non-deductible (source: IRS Publication 936). Last updated: April 2026.