Akin to a home equity loan, the lender will secure a second mortgage on the property as security. Since second mortgage lenders are at a higher risk of loss in case of default the interest rates on second mortgages are higher than those rates charged on first mortgages.

You can also employ a second mortgage for consolidating credit card debts. This can reduce the monthly payments, reduce your overall interest rates and payments and transform monthly compound interest to semi-annual interest. Furthermore, it is better to use these funds for heavier expenses, as the repayment amount can be higher than the original mortgage.