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Interim Finance said that one in seven second mortgage applications are coming from brokers writing their very first second mortgage deal.
This trend points to a few changes in the industry. The first is the diverse needs of the modern borrower but also improvements to broker education.
Isaiah Tait, Interim Finance’s national BDM, said second mortgages are “no longer just the domain of seasoned private lending specialists.”
These offerings are becoming part of the “everyday” broker’s arsenal, helping cater to the evolving needs of borrowers.
“When brokers understand when and why to use a second mortgage – especially in transitional moments where banks say not yet – they’re able to act decisively without disrupting long-term banking strategies,” Tait said.
Interim Finance specialises in second mortgages but still understands the niche use case of these loans.
Tait said these loans “serve as a short-term bridge” that “complements – not replaces – the bank’s role in the deal.”
“We step in when the client can’t wait, but the long-term refinance strategy is still intact. It’s about solving the now while preserving the bigger picture,” he said.
Essentially, second mortgages are the right fit when the numbers aren’t quite ready, but the deal is time-sensitive. They’re “structured with the exit in mind.”
According to Tait, deals include:
- Incomplete or in-prep financials.
- ATO debt or tax issues.
- Business income too new for traditional servicing.
- Timing risk (client needs to settle in compressed time frames).
“Rather than forcing a full refinance, a second mortgage lets the broker solve the immediate need while preserving the long-term strategy,” Tait said.
“This is transitional finance done right — brokers say ‘yes’ now, without compromising the refinance plan later.”
Over the last six months, Interim Finance witnessed 72 per cent of its discharged second mortgages refinanced. Over 80 per cent of those were taken out by major banks.
Tait said there are a variety of borrower use cases that second mortgages can assist with:
- Settle urgent liabilities (like tax debt or lease payouts).
- Unlock working capital for business growth.
- Consolidate unsecured debts.
- Seize time-sensitive opportunities (stock, expansion, acquisitions).
- Pay suppliers or manage cash flow gaps.
- Fund marketing, equipment, or fitouts.
- Support business recovery or prepare for refinance.
While not suitable for every client, brokers who take the time to understand second mortgages are better equipped to meet the varying needs of consumers.
Education around these types of loans is on the rise, said Tait.
Further benefits include income protection: “Brokers don’t have to lose trail or risk clawbacks from full refis, a second mortgage can plug the gap without touching the first,” he said.
Tait urged brokers who are considering second mortgages to understand the blended rate.
This refers to the actual, weighted cost of the financing structure when a higher-rate second mortgage is combined with a lower-rate first.
“Blended rate thinking lets brokers move beyond the sticker price – and focus on the outcome. It reframes the second mortgage as a strategic stepping stone, not an expensive detour,” he said.
