What is Second Mortgage Interest?

Second mortgage interest refers to either the interest rate or the amount of interest paid on money borrowed in the form of a second mortgage. In a second mortgage, a borrower takes all or a portion of the equity from his home in the form of a loan. This is often done for the purpose of paying off high-interest debt such as credit card debt, or for making improvements to a home. The interest rate on a second mortgage is almost always significantly higher than that of a first mortgage. Some of the parameters of second mortgages are similar to those of first mortgages. For instance, second mortgage interest rates, if they are fixed, will remain constant throughout the term of the loan. If the second mortgage interest rate is adjustable, the rate will change at regular intervals. The differences can make a huge impact on the borrower, however. The amount of time the borrower has to repay the loan is usually shorter than in the case of first mortgages. This is because a second loan represe ... more