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Mortgage placed on a property after a previous mortgage. It can be a second, third, etc. mortgage. A junior mortgage is subordinate to the terms of a previous mortgage. Junior mortgages usually require a premium interest rate. For example, John, buys a home for $175,000 and obtains a $100,000 first mortgage. In order to enable him to complete the financing for the property, he obtains a $40,000 junior mortgage requiring a $35,000 cash down payment.