What characteristic is associated with a second mortgage?

A second mortgage is often associated with a higher rate of interest when compared to a first mortgage. This is primarily due to the increased risk lenders take on when financing a second mortgage. In the event of default, the first mortgage lender has priority over the assets, meaning that the second mortgage lender may not recover their funds if the property goes into foreclosure. To compensate for this higher risk, lenders typically charge a higher interest rate on second mortgages.

The other characteristics mentioned do not accurately reflect the nature of second mortgages. For instance, second mortgages do not necessarily come with a guarantee by the government, nor are they exclusive in terms of down payment requirements—they may still require some form of payment in certain scenarios. Additionally, the interest rate on a second mortgage is expected to be higher, not lower, compared to a primary mortgage, which is typically seen as a more secure investment for lenders.