Second Mortgage Calculator

YOUR BLENDED RATE

4.125%

$400,000 at 3.250% alongside $80,000 at 8.500%, weighted by balance. Against a refinance at 6.750% that is cheaper by 2.625 points — and unlike a payment comparison, this one cannot be flattered by stretching the term.

Refinancing would reprice $400,000 you already borrowed at 3.250%. To reach $80,000 of equity it moves the entire balance to 6.750%, which is why the second wins here despite carrying a much higher rate on its own. The second only charges 8.500% on the $80,000 you actually need, and leaves the cheap money alone.

Read the payments carefully, because the longer term flatters the refinance. Over 30 years it costs $3,113.27 a month against $2,910.58 for the first plus a second — which looks close. Over the 22 years actually left on your first, the same refinance is $3,494.90. Of the $418,559 interest gap, $220,436 is the rate and $198,123 is simply borrowing for longer.

The answer flips when your first is at 6.40%. Below that the blend beats the refinance; above it the refinance wins. The threshold moves with how much you borrow — take more and the second rate weighs heavier in the blend, so refinancing becomes attractive at a lower first rate. Anyone holding a mortgage written when rates were low should check this before assuming a cash-out is the simpler route.

This is an estimate, not financial advice. It compares interest only — a refinance also carries closing costs of several thousand, while a second usually carries less, and both are secured on your home. Second lien position is why the rate is higher: in a forced sale the first is paid before it, so the lender is taking more risk. Interest is deductible only where the money goes on substantial improvements to the property securing it, not for consolidating other debt.