Second Mortgage in Calgary: How Private Second Mortgages Work
Calgary incomes can swing with the energy cycle, contract work and commissions — and banks qualify you on the low years. When that keeps you from borrowing against your home's equity, a private second mortgage can bridge the gap while your first mortgage stays in place. Here's how it works in Calgary, including the Alberta rules that make lenders cautious.
Key takeaways
- A private second mortgage is registered behind your first; your first mortgage is unchanged.
- Typical 2026 pricing: about 10% to 15% interest-only, with a 2% to 5% lender fee.
- Alberta's Law of Property Act often limits lenders to the property itself, so Calgary second lenders keep combined loan-to-value conservative.
- Mortgage brokers are licensed by RECA; foreclosure runs through the Court of King's Bench.
What is a private mortgage?
A private mortgage is a loan on your home from a non-bank lender — a mortgage investment corporation, a private lending company or an individual investor. It's approved on equity and the property rather than bank ratios or the stress test, which helps when your income is real but uneven.
What is a second mortgage?
A second mortgage is registered on title behind your first. Example: a $650,000 Calgary home with a $360,000 first mortgage. A $90,000 second brings combined loan-to-value to 69.2%. Even where a lender allows 75% combined — up to $127,500 here — many Alberta second lenders prefer to stay lower.
Why are private mortgage positions important?
In a judicial sale, the first mortgage is repaid before the second. In Alberta, section 40 of the Law of Property Act generally restricts a lender to the land and foreclosure on many mortgages given by individuals, with exceptions such as corporate borrowers and insured mortgages. For a second lender, that means the equity above the first mortgage may be its only real protection — so position and loan-to-value drive everything.
Who lends second mortgages in Calgary?
- Alberta-based mortgage investment corporations and national MICs with Calgary programs.
- Private lending companies and individual investors, through RECA-licensed brokerages.
- Credit unions, which set their own rules and can sometimes lend against equity on documented contract income.
How does the payment work on a Calgary second mortgage?
Interest-only, with fees from the advance. For the $90,000 second at 11.99%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $877.58 |
| Interest over 12 months | about $10,531 |
| Lender fee (3%) | $2,700 |
| Broker fee, where one applies (1%) | $900 |
| Legal and appraisal (estimate) | about $2,100 |
| Effective first-year cost | about 19.3% of the net funds |
Alberta also charges a mortgage registration levy of $50 plus $5 per $5,000 of principal — about $140 on this loan.
What's the term of a second mortgage?
Usually 12 months. A common Calgary exit: a stronger income year on your tax return, then a refinance of both mortgages together at your first mortgage's renewal.
What are the criteria to get approved for a second mortgage in Calgary?
- Combined loan-to-value within the lender's limit, often more conservative than in Ontario.
- An appraisal of the property.
- First mortgage and property taxes current.
- Evidence of ability to pay — contracts, bank deposits, savings or a prepaid interest reserve.
- A defined exit.
Why are second mortgage rates higher than traditional mortgages?
The lender is second in line, uses investor capital, can't insure the loan and has a short term to earn its return. In Alberta, court foreclosure and limits on personal recovery increase the lender's risk further.
What are the pros and cons of a second mortgage in Calgary?
| Pros | Cons |
|---|---|
| Bridge a low-income year without breaking your first mortgage | High effective cost on smaller loans |
| Alberta borrower protections on many mortgages | Lenders offset them with lower limits |
| Approval on equity, not bank ratios | Two payments each month |
| No land transfer tax on Alberta purchases | Interest-only, short term |
Sources
This article is general information, not financial or legal advice. Rate and fee ranges are typical of the private market in 2026 and vary by lender, property and file. Examples are illustrative and rounded, not market averages. Mortgage financing is subject to lender approval.
Frequently asked questions
Yes. Private lenders focus on equity and recent deposits rather than two-year income averages.
Since January 31, 2025, the levy is $50 plus $5 for every $5,000 of mortgage principal.
On many mortgages given by individuals, the Law of Property Act limits the lender to the property, but there are exceptions. Get legal advice on your own mortgage.
The Real Estate Council of Alberta (RECA).
Calgary homeowner? See your equity options.
We'll compare Alberta private lenders, MICs and credit unions on total cost and plan your exit.