A second mortgage sits behind a mortgage registered against the title of your property. Hence, the first mortgage is placed there by your bank. Consequently, second mortgage finance allows access to equity without the need to refinance the first mortgage.
As the first and second mortgage loans are separate facilities’; there are still equity limitations. Let’s look at this example:
Given that, private finance can access a portion of the $400,000 up to their maximum allowable LVR.