A second mortgage is exactly what it sounds like, another mortgage that you take out against the same property as your main mortgage.
What Is a Second Mortgage and How Does It Work?
A second mortgage is a separate loan that uses the same property as security as your first mortgage. It’s often used when your bank won’t increase the main loan but you still need funds for renovations, business use, or debt consolidation. As an independent mortgage broker in Tauranga, we compare reputable second-tier lenders and secure terms that balance flexibility, cost, and timeframe.
Second mortgages are typically short term and can be interest-only or capitalised to keep monthly outgoings low. Rates are higher than first mortgages, but generally cheaper than personal loans or credit cards, making them a practical bridging option when managed well.
Local example: a client in Matua was declined a top-up to complete kitchen and bathroom upgrades. We arranged a short-term second mortgage, the work was finished, and the home sold above asking — clearing both loans and funding their next purchase in Otūmoetai.
When a Second Mortgage Can Help
Home renovations
Strategic upgrades to the “money rooms” (kitchen and bathrooms) can lift sale price. A second mortgage can fund the work — or provide the deposit for your next move in Welcome Bay, Greerton, or elsewhere in Tauranga.
Growing your business – working capital
Stock, equipment, or extra space often need upfront investment. A second mortgage can provide affordable capital without disturbing your main home loan.
Consolidating debt
Rolling multiple high-interest debts into a single second mortgage can reduce total interest and simplify repayments.
Good equity but low income
If you’ve got strong equity but don’t meet your bank’s income criteria, a second mortgage can cover short-term costs for land or a build until you refinance or sell.
Tax / GST arrears
For self-employed clients facing IRD arrears, a second mortgage can help settle quickly and avoid compounding penalties.
At Best Mortgages Tauranga, we work directly with specialist lenders to get fast decisions — often within 24 hours. If you’re wondering whether a second mortgage is right for you, we’ll assess your position and outline a safe, cost-effective plan.
Whether you’re buying your first home, refinancing for a better deal, or planning your next investment move, now’s the perfect time to get expert advice. Our friendly team at Best Mortgages is based right here in Tauranga and helps Kiwis across the Bay of Plenty make sense of these market shifts. We speak plain English (and a bit of Kiwi slang when needed) and work for you – not the banks – to find the right solution.
Ready to explore your options? Contact us today for a free, no-obligation chat and we’ll walk you through the latest rates, rules, and opportunities tailored to your goals. Let’s turn those property dreams into reality this spring – we’re only a phone call or coffee catch-up away. See our reviews to know why we are called the best. Also stay up to date with our latest news for the best tips and advice.
Best Mortgages — Operated by Ewald Biesenbach (FSP 320426) under The Best Limited (FSP 724451 – NZBN 9429043352067). Licensed under the Financial Services Legislation Act 2019.
When should I consider getting a second mortgage?
A second mortgage is ideal when your bank declines extra lending but you still need funds for renovations, business growth, or debt consolidation. It can also help Tauranga homeowners in areas like Matua or Greerton who want short-term flexibility while keeping their main loan at low rates.
How much can I borrow with a second mortgage?
It depends on your property value, income, and equity. Most lenders allow borrowing up to 80 % combined between the first and second mortgage. As Tauranga mortgage brokers, we’ll calculate how much equity you can safely access and structure your loan to protect your cash-flow.
Are second-mortgage interest rates very high?
They’re higher than standard mortgages but generally cheaper than credit cards or personal loans. We work with multiple Bay of Plenty lenders to secure competitive short-term rates — often fixed for 6 to 24 months.
How quickly can a second mortgage be approved?
Specialist lenders can issue approvals within 24 hours once we have the property value and documents. We handle the full process, from valuation to settlement, so you can access funds fast for projects in suburbs like Pyes Pa or Bethlehem.
Will a second mortgage affect my relationship with my bank?
Not at all. Your main home loan stays with your bank at its normal rate, and the second mortgage sits alongside it. This lets you maintain your banking relationship while funding short-term needs through an independent lender.
