Second Mortgage Payment Calculator
to Calculate Home Equity Payment

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Explains what a "2nd mortgage" is and what its drawbacks are, and helps you to determine the PI payment and the required work hours.

This free online Second Mortgage Payment Calculator will calculate the monthly principal and interest payment needed to repay a home equity loan, plus calculate the total interest you will pay by the time you pay off the loan.

Plus, unlike other second mortgage calculators, the second home mortgage calculator on this page will even calculate how many hours you will need to allocate to working in order to pay just the interest on the home equity loan.

Note: If you would like to calculate the size of the home equity loan you might qualify for, please visit the Home Equity Loan Calculator.

Second Mortgage Definition

In case you're not familiar with the term, a second mortgage (otherwise referred to as a Home Equity Loan) is simply a loan taken out against your home after you already have a first mortgage.

What is Second Mortgage?

Basically, a second mortgage allows the borrower to tap into the equity they have accumulated over the course of repaying their first mortgage. Equity is the difference between what you owe on the home and what the home is expected to sell for. So if you currently owed $125,000 on a home that would sell for $150,000, you would have $25,000 in equity.

Of course the lending institutions view the equity in your home as a potential revenue source. Depending on how much of your home's appraised value they are willing to allow you to borrow (loan to value ratio), lending institutions are usually quite anxious to let you re-borrow a portion of the funds you've worked so hard to pay off.

Most people who take out second mortgages do so because they need access to a large sum of cash, cash for things like home remodeling, debt consolidation, or paying for their child's college education.

Disadvantages of Second Mortgages

The drawbacks to taking out a home equity loan, are as follows.

Increased Risk: If an unexpected event causes your income to drop and you can no longer afford your first mortgage payment, you may end up losing your home -- but still be liable for the 2nd loan. That's because the holder of the first house loan gets paid first when the home is sold in foreclosure, and if the proceeds aren't enough to cover the equity loan, you are left holding the bill -- even though you no longer own the home.

Higher Rates: Since the lender holding the equity loan is more at risk than the primary lender, interest rates for second mortgages are typically higher than rates for first mortgages. Therefore, if you are considering an equity loan, you might be better off by refinancing your first mortgage with a "cash-out" option. This would allow you to withdraw the needed cash from your available equity while still paying the lower interest rates.

Living Beyond Your Means: Make no mistake, if you are borrowing money to purchase goods and services, you are living beyond your means. And the more you live beyond your means, the more likely it is that at some time in the future your over-spending will catch up with you -- perhaps causing you to endure a long period of financial hardship.

With that, let's use the Second Mortgage Payment Calculator to calculate the monthly principal and interest payment you will need to make on your home equity loan.

2nd Mortgage or Home Equity Payment Calculator
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Instructions: Enter the home equity loan amount, the annual percentage rate (APR), the second loan term in years, and your real hourly wage (optional), then click the "Calculate 2nd Mortgage Payment" button.

Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Second Mortgage Payment Calculator.

Help Second mortgage loan amount ($):
Help Annual interest rate (%):
Help Term of 2nd loan in number of years (#):
Help Real hourly wage ($):
Help Monthly second mortgage payment:
Help Total of all second mortgage payments:
Help Interest cost:
Help Number of work hours to pay interest charges:
Help 40-hour work weeks to pay interest charges:

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Second Mortgage Payment Calculator Glossary of Terms

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Second mortgage loan amount: The dollar amount of the second or home equity loan (principal amount).

Annual interest rate: The annual percentage rate (APR) of the home equity loan.

Term of 2nd mortgage in number of years: The term of the equity loan in number of years, which is usually shorter than the term of a first or primary house loan.

Real hourly wage: Optional: If you would like the second mortgage payment calculator to calculate the number of hours you will have to work just to pay the equity loan interest charges, enter your real hourly wage in this field. Clicking on the link will open the Real Hourly Wage Calculator in a new window.

Monthly second mortgage payment: This how much your second mortgage payment will be. The second mortgage payment calculator computes a principal and interest payment only and does not include and property tax, insurance, or PMI payments that may apply.

Total of all second mortgage payments: This is the total of all of your monthly second loan principal and interest payments.

Interest cost: This is how much interest you will pay between now and when you finish the 2nd loan repayment.

Number of work hours to pay interest charges: This is how many hours you will need to allocate to working in order to pay just the 2nd loan interest charges. This does not include all of the hours you will need to work to pay for the down payment, 1st loan interest and principal, 2nd loan principal, and all of the upfront and ongoing costs that come with buying and owning a home.

40-hour work weeks to pay interest charges: This is how many 40-hour work weeks it will take you to just to pay the second loan interest charges. Again, this does not include all of the 40-hour work weeks it will take you to pay for the down payment, 1st loan interest and principal, 2nd loan principal, and all of the upfront and ongoing costs that come with buying and owning a home.

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