Legal Definitions - senior mortgage

A senior mortgage is a type of mortgage that has priority over another mortgage, which is known as a junior mortgage, on the same property. It means that if the property is sold or foreclosed, the senior mortgage will be paid off first before the junior mortgage.

For example, if a homeowner has two mortgages on their property, a senior mortgage of $200,000 and a junior mortgage of $50,000, and the property is sold for $250,000, the senior mortgage will be paid off in full before any money goes towards the junior mortgage.

Senior mortgages are important because they provide security to the lender that they will be paid back before any other creditors if the property is sold or foreclosed. This makes them less risky for lenders and can result in lower interest rates for borrowers.