A second mortgage, in layman’s terms, is an additional loan taken out on a property that already has an existing mortgage. This loan allows homeowners to borrow against the equity they have built up in their home. A second mortgage can be in the form of a lump sum loan or a home equity line of credit (HELOC). The interest rates for second mortgages are usually higher than the primary mortgage but lower than unsecured loans. If the borrower defaults, the first mortgage is paid off before the second, making it riskier for the lender.