Which of the following is considered a subordinate mortgage?

A subordinate mortgage refers to a loan that is secured by a property, which ranks below another loan in terms of payment priority, typically in the event of foreclosure. The second mortgage taken out against an already financed property is indeed considered a subordinate mortgage because it is secondary to the first mortgage. This means that if the borrower defaults and the property is sold to pay off debts, the proceeds from the sale will first go to pay off the first mortgage lender. Only after that debt is satisfied will the second mortgage lender receive any funds.

In practice, this makes subordinate mortgages riskier for lenders, as they may not recover their full amount if the property's value does not cover all outstanding debts. A borrower typically takes out a second mortgage to access additional funds when home equity has built up but might pay a higher interest rate due to the increased risk to the lender.

In contrast, a first mortgage on a primary residence is considered a primary or senior loan. A personal loan for home renovations is generally an unsecured loan and does not relate directly to the property in the same manner as a mortgage. A home equity line of credit is often secured by the property but functions somewhat differently than traditional subordinate mortgages, as it allows for borrowing against the equity available at various intervals,