Over the last several years, the housing and lending markets have experienced unprecedented shifts. Homeowners enjoyed record-low interest rates—some of the lowest in modern financial history—causing nearly everyone who could refinance to do so. At the same time, home prices jumped dramatically, especially in New Mexico, causing home equity to climb to levels many homeowners have never seen before.

And now homeowners are trying to answer one big question:

How do I access my equity without giving up my incredibly low mortgage rate?

According to Ben Lucero, owner of Indigo Mortgage, the answer for many borrowers in today’s market is a 2nd mortgage—and that’s why these loans have become one of the most popular tools for homeowners in 2025 and 2026.

But the rise of 2nd mortgages didn’t happen by accident or by trend. It happened because of economics, timing, equity growth, and homeowner behavior. Below, Ben breaks down exactly why 2nd mortgages make sense today, how they work, and how Indigo Mortgage helps borrowers choose the right path.

Why 2nd Mortgages Are More Popular Than Ever

A 2nd mortgage (also called a home equity loan) allows homeowners to borrow against the equity in their home without altering their existing first mortgage. And right now, that’s exactly what homeowners want.

Here’s why the demand is skyrocketing:

1. Homeowners Locked in Historically Low Mortgage Rates

From 2020 to 2022, mortgage rates dipped into the 2 percent and low 3 percent range. These were once-in-a-generation rates—far lower than the long-term average of 5 to 7 percent. Almost everyone refinanced to take advantage of that opportunity.

Now that interest rates have climbed significantly, many homeowners are facing a dilemma:

• They want to use their equity.
• But they do not want to refinance into a mortgage rate that is double what they currently have.

If a homeowner refinanced today into a much higher rate, their payment could increase by several hundred dollars a month—all to access equity they already own.

That’s where a 2nd mortgage solves the problem perfectly.

2. Home Equity Has Increased Rapidly

Thanks to strong demand and limited housing supply, property values across New Mexico have surged. Many homeowners are sitting on $100,000, $200,000, or even more in equity.

This equity represents financial power—but only if accessed the right way.

Ben explains:

“Homeowners now have more equity than ever, but refinancing their entire mortgage into today’s rates makes no sense. A 2nd mortgage lets them use their equity while keeping their low first-mortgage rate in place.”

3. A 2nd Mortgage Has a Smaller Balance, Making the Higher Rate Manageable

While 2nd mortgages typically carry a higher interest rate than first mortgages, the loan amount is much smaller. Instead of refinancing a $300,000 first mortgage into a higher rate, a homeowner might take out a $40,000 to $80,000 2nd mortgage instead.

This results in:

• A much lower total monthly payment
• A preserved low-rate first mortgage
• Access to cash when needed most

The math simply works in the homeowner’s favor.

4. 2nd Mortgages Provide Flexibility Without Long-Term Risk

A refinance replaces your entire mortgage. A 2nd mortgage overlays it.

This gives homeowners flexibility:

• They can keep their current mortgage intact.
• They can access equity now.
• They can refinance both loans together in the future if rates ever drop again.

In other words, a 2nd mortgage offers a short-term solution with long-term optionality.

Common Reasons Homeowners Are Taking Out 2nd Mortgages

Ben warns homeowners not to think of a 2nd mortgage as only for emergencies. Today’s borrowers are using 2nd mortgages strategically—and smartly.

Here are the most common reasons Indigo Mortgage sees:

Home Renovations and Upgrades

Kitchens, bathrooms, flooring, roofing, landscaping, or full remodels. Homeowners are choosing to improve the home they already love instead of buying at today’s higher prices.

Debt Consolidation

High-interest credit card debt has become overwhelming for many families. A 2nd mortgage allows them to:

• Combine debt
• Significantly lower monthly payments
• Free up cash flow
• Pay off debt faster

This is one of the most financially impactful uses of home equity.

College Tuition or Educational Expenses

Parents often use equity to fund a child’s college education rather than taking out expensive private student loans.

Medical Expenses or Major Life Events

A 2nd mortgage can provide financial peace of mind during unexpected situations.

Investment Opportunities

Some borrowers use equity to:

• Purchase investment property
• Start a business
• Build savings or emergency funds

When used wisely, equity can generate long-term financial growth.

How Indigo Mortgage Helps Borrowers Evaluate Whether a 2nd Mortgage Makes Sense

A 2nd mortgage is a powerful tool—but only when used correctly. Indigo Mortgage takes a comprehensive approach to determining whether it’s the right fit.

Ben explains:

“We help borrowers compare refinancing the whole mortgage versus taking out a 2nd mortgage. Our job is to give homeowners clear numbers so they can make a confident decision.”

Here’s what Indigo Mortgage provides:

1. Payment Comparison Analysis

Indigo Mortgage lays out all the numbers:

• What your payment is now
• What it would be with a full refinance
• What it would be with a 2nd mortgage
• What your combined payment would look like

Seeing the numbers side by side makes the decision simple.

2. Long-Term Cost Evaluation

Ben and his team help borrowers understand:

• Interest costs
• Total repayment amounts
• Break-even points
• Whether a refinance ever becomes beneficial
• How future interest rate changes could affect options

This ensures homeowners choose the most cost-effective strategy.

3. Clear Explanation of Loan Terms

2nd mortgages come with different:

• Fixed-rate options
• Term lengths
• Monthly payment structures

Indigo Mortgage explains each one so borrowers feel fully comfortable.

4. Equity and Goal Alignment

Every borrower’s situation is unique. Indigo Mortgage takes time to understand:

• How much equity you need
• What the money will be used for
• Your long-term financial goals
• Whether a HELOC, home equity loan, or full refinance is better

This personalized approach is what sets Indigo Mortgage apart from online lenders or call-center banks.

Examples of When a 2nd Mortgage Makes Perfect Sense

Example 1: The Home Renovation Borrower

• Current first mortgage: $260,000 at 2.99 percent
• Wants to remodel kitchen and bathrooms: needs $60,000
• Refinancing entire mortgage would raise payment by over $600 per month

A $60,000 2nd mortgage allows the borrower to complete renovations with a manageable payment added while keeping the low first-mortgage rate.

Example 2: Debt Consolidation Family

• $35,000 in credit card debt
• Interest rates ranging from 18 to 27 percent
• Existing mortgage at 3.25 percent

A 2nd mortgage consolidates all debt into one payment at a fraction of the interest rate, improving cash flow and allowing faster payoff.

Example 3: Borrower Who Already Refinanced

• Refinanced at 2.75 percent in 2021
• Needs cash for medical expenses
• Does not want to lose their low rate

A small 2nd mortgage gives them the financial support they need without disrupting their low first mortgage.

Why Working with Indigo Mortgage Matters

The market is unique, the stakes are high, and borrowers deserve guidance they can trust. Indigo Mortgage offers:

• Decades of local mortgage experience
• Transparency without pressure
• The ability to compare multiple loan types
• Honest analysis based on numbers, not sales tactics
• Clear, friendly communication from New Mexico mortgage experts

Ben built Indigo Mortgage on integrity and education, and those values guide every borrower conversation today.

Thinking About Using Your Equity? Indigo Mortgage Can Help.

Whether you are exploring a cash-out 2nd mortgage, considering home improvements, or simply want to understand your options, Ben Lucero and his team are ready to help.