Second mortgages are mortgage loans that are recorded after a first mortgage. They can be fixed or variable. Fixed rate second mortgages are called closed end second mortgages. Variable rate second mortgages are called Home Equity Lines of Credit or HELOC loans.

People take second mortgages for home improvement or debt consolidation. Many individuals use their HELOC as a rolling line of credit or for the same purpose as a fixed second mortgage. With a HELOC the payment is based on the amount borrowed against the credit limit.