Define: Junior Mortgage

UK Accounting Glossary

Definition: Junior Mortgage



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Full Definition of Junior Mortgage


A junior mortgage is a mortgage that is subordinated to some other mortgage or lien. Subordinated debt such as a junior mortgage is paid after unsubordinated, or senior, debt. The junior mortgage is sometimes called a second mortgage. The senior mortgage is called the first mortgage. It is possible for a property to have more than one junior mortgage. If a second mortgage already exists, the next junior mortgage would be called the third mortgage and be subordinated to both the first and second. A junior mortgage has a higher risk of default, and this risk is usually offset by a higher interest rate. Sometimes a junior mortgage and first mortgage can be consolidated through refinancing to lower the cost of borrowing by eliminated subordinated debt.


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Definition Sources


Definitions for Junior Mortgage are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.