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.
Frequently Asked Questions
What is the maximum CLTV for a second mortgage?
Most lenders cap combined loan-to-value at 80% to 85%, with some going up to 90% for borrowers with excellent credit (740+) and low debt-to-income ratios. Above 85% CLTV, expect higher rates and stricter underwriting (source: cfpb.gov).
What is the typical interest rate on a second mortgage in 2026?
Fixed-rate second mortgages range from about 7.5% to 10% in early 2026, depending on credit score, CLTV, and lender. Expect rates 1-3 percentage points above current 30-year first-mortgage rates.
How is a second mortgage different from a HELOC?
A second mortgage is a one-time lump sum with fixed payments at a fixed rate. A HELOC is a revolving line of credit you draw from over a 10-year period at a variable rate. Choose a second mortgage for predictable payments; choose a HELOC for ongoing flexibility.
Can I get a second mortgage with bad credit?
Lenders typically require 660+ credit scores. Below 640 is very difficult. Some non-bank lenders work with 580-660 scores at significantly higher rates and lower CLTV caps. Improving your credit before applying often saves thousands.
Is interest on a second mortgage tax deductible?
Only if the loan is used to buy, build, or substantially improve the home, and total mortgage debt is under $750,000 ($375K MFS). Debt consolidation or non-home use makes the interest non-deductible (source: IRS Publication 936).
What happens to a second mortgage in foreclosure?
If the first mortgage forecloses, the first lender is paid first from sale proceeds. The second mortgage gets paid only if equity remains. If sale proceeds don't cover the second mortgage, the lender may pursue you personally for the deficiency depending on state law.
Is this calculator's payment estimate exact?
This calculator uses the standard amortization formula and matches lender disclosures within rounding. Final payment amounts depend on exact closing date and lender-specific fees. Always review your Closing Disclosure for the official figures.