Second Mortgage in Edmonton: How Private Second Mortgages Work
Edmonton homes cost less than those in Toronto or Vancouver, so second mortgages here are usually smaller — which changes the math. Fixed costs like legal fees and the appraisal take a bigger bite, and some private lenders have minimum loan sizes. Here's how a private second mortgage works in Edmonton, what it really costs, and when another option may be cheaper.
Key takeaways
- A private second mortgage sits behind your first mortgage, which stays unchanged.
- Typical 2026 pricing: about 10% to 15% interest-only with a 2% to 5% lender fee — often toward the upper end on smaller loans.
- On a small second, fixed costs can push the effective first-year cost above 20%.
- Alberta rules apply: RECA-licensed brokers, court foreclosure and Law of Property Act protections.
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 — approved on equity and the property rather than bank ratios or the stress test. In Edmonton they're used for debt consolidation, CRA arrears, catching up a first mortgage, and by self-employed and trades borrowers between income years.
What is a second mortgage?
A second mortgage is registered behind your existing first. Example: a $480,000 Edmonton home with a $250,000 first mortgage. A $70,000 second brings combined loan-to-value to 66.7%. A lender allowing 75% combined could go to $110,000, though many Alberta lenders prefer to stay lower.
Why are private mortgage positions important?
In a judicial sale, the first mortgage is paid in full before the second. Alberta's Law of Property Act often limits lenders to the property on mortgages given by individuals, with exceptions — so a second lender relies almost entirely on the equity above the first mortgage. That's why Edmonton seconds are priced for risk and kept within conservative limits.
Who lends second mortgages in Edmonton?
- Alberta-based and national mortgage investment corporations.
- Private lending companies and individual investors, through RECA-licensed brokerages.
- Credit unions, which may offer lower-cost equity loans if your income can be documented.
How does the payment work on an Edmonton second mortgage?
Interest-only, with fees from the advance. For the $70,000 second at 12.49%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $710.32 |
| Interest over 12 months | about $8,524 |
| Lender fee (3%) | $2,100 |
| Broker fee, where one applies (1%) | $700 |
| Legal and appraisal (estimate) | about $2,100 |
| Effective first-year cost | about 20.6% of the net funds |
That's still well below the 35% APR legal cap, but it shows why borrowing a small amount privately is expensive. If you need less than about $50,000, ask about a credit-union loan or line first.
What's the term of a second mortgage?
Usually 12 months. The cleanest exit is to refinance both mortgages together when your first renews, avoiding a break penalty.
What are the criteria to get approved for a second mortgage in Edmonton?
- Combined loan-to-value within the lender's limit, often more conservative than in Ontario or BC.
- A loan size above the lender's minimum.
- An appraisal; condos and properties outside the city face stricter limits.
- First mortgage and property taxes current.
- Evidence of ability to pay and a clear exit.
Why are second mortgage rates higher than traditional mortgages?
The lender is second in line, uses investor money, can't insure the loan and has a short term to cover its costs. Small loans earn less in dollars for the same work, so they tend to price higher.
What are the pros and cons of a second mortgage in Edmonton?
| Pros | Cons |
|---|---|
| Keep your existing first mortgage | Fixed costs make small loans expensive |
| Approval on equity | Lender minimum loan sizes |
| Alberta borrower protections on many mortgages | Conservative loan-to-value limits |
| Quick funding for arrears | 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
It varies by lender; many private lenders have minimums in the tens of thousands of dollars because the legal and appraisal work is the same whatever the size.
Usually cheaper than credit cards at 20%-plus, especially on larger balances. For small amounts, compare a credit-union loan.
The lender can start foreclosure in the Court of King's Bench. There's a redemption period — six months by default for non-farm land — but legal costs are added to the debt. Get advice early.
Alberta has no land transfer tax. A new mortgage pays a registration levy of $50 plus $5 per $5,000 of principal.
Edmonton homeowner? Compare before you borrow.
We'll compare private seconds with credit-union options and show the true cost of each, in writing.