Best 2nd Mortgage Calculator

Reviewed by David Chen, CFA | Home Equity Specialist | Last Updated: November 2023

Tapping into your home equity? Use this best 2nd mortgage calculator to estimate monthly payments for a Home Equity Loan or HELOC (during the repayment period) to fund renovations or consolidate debt.

Second Mortgage Calculator

Loan Amount (Equity Used)

Please enter a valid loan amount.

Interest Rate (r)

Please enter a valid interest rate.

Loan Term (n)

Years

Typically 10-20 years for 2nd mortgages.

Please enter a valid term.

Estimated Monthly Payment

$0.00

*Principal & Interest

Best 2nd Mortgage Calculator Formula

Second mortgages (Home Equity Loans) typically function as fixed-rate installment loans. The monthly payment is calculated using the standard amortization formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Source: Investopedia: Second Mortgage Basics

Variables

M: Monthly Payment.
P: Loan Amount (The equity you are borrowing).
i: Monthly Interest Rate (Annual Rate / 12).
n: Total Number of Payments (Years × 12).

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What is the Best 2nd Mortgage Calculator?

The best 2nd mortgage calculator is one that accurately estimates payments for Home Equity Loans and HELOCs (in the repayment phase). Unlike a primary mortgage, second mortgages often have shorter terms (e.g., 10, 15, or 20 years) and higher interest rates because they are subordinate to the first lien.

This tool helps you budget for the additional monthly cost of borrowing against your home equity, ensuring you can afford both your primary mortgage and this new obligation.

How to Calculate Best 2nd Mortgage Calculator (Example)

Example: Borrowing $50,000 for a kitchen remodel.

Loan Amount (P): $50,000.
Interest Rate (r): 8.5% (Common for 2nd liens).
Term (t): 15 years.
Monthly Rate (i): 0.085 / 12 = 0.007083.
Total Months (n): 15 × 12 = 180.
Result: The monthly payment is approximately $492.37.

Frequently Asked Questions (FAQ)

Is this for a Home Equity Loan or HELOC?

This calculator models a **Home Equity Loan** (fixed rate, fixed term). It can also estimate the repayment phase of a HELOC if you know the balance and term, but HELOCs usually start with an interest-only draw period.

Are rates higher for 2nd mortgages?

Yes. Because the lender is in “second position” (meaning they get paid last if you default), second mortgage rates are typically higher than primary mortgage rates.

Can I consolidate debt with this?

Yes. Many homeowners use a second mortgage to pay off high-interest credit card debt. Use this calculator to compare the new mortgage payment against your current total monthly debt payments.

Are there closing costs?

Yes, closing costs for a second mortgage usually range from 2% to 5% of the loan amount, though some lenders offer “no closing cost” options in exchange for a higher interest rate.