First vs Second Mortgage Calculator
Compare refinancing first mortgage vs adding a second.
Compare refinancing your first mortgage against taking out a second mortgage for the same cash need. Enter first mortgage balance and see the result instantly.
What this tool does
Enter cash need, current first rate, new first rate option, and second mortgage rate option. The tool shows monthly payment for each route.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Need 50,000 cash with an existing 200,000 mortgage at 4%. Refinance to 250,000 at 4.5%: payment 1,389. Keep the first at 4% and add a 50,000 second at 7%: 1,258 (first) + 354 (second) = 1,612. The refinance wins by about 19/month — close call. Rates and fees flip this often — run the numbers before committing.
A worked example
Try the defaults: current first mortgage balance of 200,000, current first rate of 4%, cash needed of 50,000, new refinance rate of 4.5%. The tool returns 19.48. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Current First Mortgage Balance, Current First Rate, Cash Needed, New Refinance Rate, and Second Mortgage Rate. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.
The formula behind this
Compute amortised payment for each route. Difference is the winner's saving. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Why this matters before you sign
A mortgage is usually the biggest single financial commitment a person makes. The difference between a well-chosen product and a hasty one can run into tens of thousands over the life of the loan. Running the numbers here before committing is the cheapest form of due diligence available.
What this doesn't capture
The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.
First vs second mortgage produces a payment comparison based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Compute amortised payment for each route. Difference is the winner's saving.
Frequently Asked Questions
When does second-mortgage win?
What about second-mortgage risk?
Fees to consider?
HELOC alternative?
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