In real estate finance, a wrap around mortgage is a junior or second mortgage that includes within its face amount both the new loan it secures and the unpaid balance of an existing first mortgage. The original loan remains in place, but it is incorporated into the larger wrap around obligation.

Under this arrangement, the wrap around mortgagee collects payments from the borrower based on the total face value of the wrap around loan and then makes the required payments to the first mortgagee. The difference between the two payment amounts may provide additional return to the wrap around lender.