Second Mortgage Calculator 

Price a second mortgage (home equity loan) alongside your first. Enter your home value, first mortgage balance and payment, and the proposed second loan to get its monthly payment, total interest, combined loan-to-value (CLTV), and the maximum you could borrow at a target CLTV. Before you decide how much to borrow, confirm the equity figure itself with our available equity calculator.

Quick Answer

Worked example, checked against this exact tool

Home value $520,000, first mortgage $310,000 at $1,703/mo, second loan $60,000 at 8.25% for 15 years, lender max CLTV 85%. Enter 520000, 310000, 1703, 60000, 8.25, 15. The second payment is $582.08/mo; combined payment $2,285.08; total interest on the second loan $44,775.16; CLTV is 71.15% (best-terms territory); maximum second loan at 85% CLTV is $132,000.

Second mortgage vs cash-out refinance

The key decision is usually not whether to borrow but how. A second mortgage leaves your first loan untouched; a cash-out refinance replaces it at today’s rate. When your existing rate is well below market (say 4.1% on the first mortgage), the second lien wins decisively even at a much higher headline rate, because only the new money pays the new rate. When your first-mortgage rate is already near market, refinancing the whole balance can be simpler and cheaper overall. Run both scenarios before choosing.

How much can you borrow: the CLTV cap

Lenders cap the combined loan-to-value: (first balance + second loan) ÷ home value. Most cap CLTV at 80 to 90%, commonly 85%. Your maximum second loan is home value × max CLTV − first balance: $520,000 × 85% − $310,000 = $132,000. Under 80% CLTV gets the best terms; 80 to 90% is approvable at higher rates; above 90% is difficult and may trigger mortgage insurance. Before you decide how much to borrow, confirm the equity figure itself with our available equity calculator.

Home equity loan vs HELOC

Both are second mortgages secured by your equity, but they work differently. A home equity loan delivers a lump sum at a fixed rate with a fixed payment from day one: best for one-time large expenses and rate certainty. A HELOC is a revolving credit line with a variable rate tied to prime: interest-only during the draw period, flexible for staged projects, but exposed if rates rise. This calculator models the fixed home equity loan. To price the revolving-line alternative properly, our HELOC calculator estimates rates and payments for a home equity line of credit.

The true cost beyond the payment

Budget 2 to 5% of the loan amount in closing costs: appraisal, origination, title search, and processing. Most lenders require a home appraisal to establish value and equity. From application to funds typically takes two weeks to three months. Interest may be tax-deductible, but only if the funds substantially improve the property securing the loan: check current tax rules or ask a tax adviser.

Whichever route you choose, our overpay mortgage calculator shows what extra payments do to the payoff timeline.

Typical second-mortgage payments

Monthly payment for common loan sizes at 8.5% fixed, by term. Shorter terms cost more per month but far less in total interest:

Your rate will differ with credit score and CLTV; enter your actual offer in the tool for the exact payment, total interest, and combined payment.

Taxes and closing costs: the two lines everyone forgets

Two costs sit outside the monthly payment and both change the decision. First, interest on a second mortgage is only tax-deductible when the money buys, builds, or substantially improves the home; using it to consolidate credit cards or fund a vacation loses the deduction under current law. Second, closing costs run 2-5% of the loan, including a $300-600 appraisal in most cases, and funding typically takes two weeks to three months. A $60,000 loan can therefore cost $1,200-3,000 before the first payment is due. Ask the lender for the Loan Estimate early: it itemizes every fee, and comparing two estimates side by side is the only reliable way to spot an expensive origination charge.

What competing calculators miss

The worked-example pages show one scenario; the generic tools show the payment but not how much you can borrow. This page answers both questions in one pass: the amortized payment with total interest, the CLTV band verdict, the maximum second loan at your lender’s cap, and the warnings when the numbers do not qualify, plus the second-vs-cash-out framing that actually drives the decision.

Frequently asked questions