Chattel mortgage
A chattel mortgage: own the asset from day one.
A business loan secured by the asset you buy. Suits a business buying vehicles or machinery it wants to own and keep.
You don’t pay to compare.
No credit file impact · No cost to compare · No obligation
Chattel mortgage at a glance
- Amount
- $10,000 to $2,000,000 asset value
- Term
- 1 to 7 years, fixed, with an optional balloon
- Security
- A mortgage over the asset (PPSR), not your home
- Time to funds
- Varies by lender
- How you pay
- Fixed repayments; you own the asset from settlement
Indicative, and subject to lender assessment. Your options are typically ready within 24 hours of receiving your documents.
Is it right for you?
When a chattel mortgage fits, and when it doesn’t.
Often fits
- Vehicles and machinery you want to own
- Ownership from day one
- Claiming GST upfront, if you’re registered
- Assets you’ll keep long term
Usually not
- Assets you may upgrade or return at term end, where a lease may fit
- Equipment that dates quickly, where an operating lease may fit
Business funding, compared on real data, in three steps.
How It WorksCompared
A chattel mortgage or a finance lease?
| Chattel mortgage | Finance lease | |
|---|---|---|
| Ownership | You own the asset from day one | The lender owns the asset until you buy it out |
| GST | If registered for GST, claim it upfront on your next BAS | GST claimed gradually over the lease term |
| Repayments | Fixed, with an optional balloon at end of term | Fixed, with a residual buy-out at end of term |
| Best for | Assets you want to own and keep long term | Assets you may upgrade or return at term end |
What it costs
How you pay, and what it costs.
- Rate
- Shown for each option in your report, with the APR beside it; established businesses usually pay less than newer ones
- Deposit
- Some lenders ask for 10 to 20%
- Balloon
- Optional; it lowers regular repayments but leaves a lump sum at the end
- GST
- If registered, claim the GST upfront on your next BAS
Repayment calculator
See the fixed monthly cost of owning the asset.
Fixed repayments over the term, and you own the asset from settlement. Move the slider for an indicative repayment, total repaid and total interest.
- Rates shown are simple p.a.; your report shows the APR.
- Results are approximate and exclude lender fees. Not an offer of credit.
- Monthly repayment
- $3,041/mo
- Total repaid
- $182,488
- Total interest
- $32,488
Illustrative only, based on an 8% p.a. indicative rate over a 5-year term. Your Compare Report shows the exact rate and term each lender offers your business.
Questions about chattel mortgages.
What is a chattel mortgage?
A chattel mortgage is a business finance arrangement where you purchase an asset, like a vehicle or equipment, and the lender takes a mortgage over the asset as security until the loan is repaid. Unlike a lease, you own the asset from day one.
How does a chattel mortgage differ from a lease?
With a chattel mortgage, you own the asset from day one. With a lease, the lender owns the asset and you pay to use it. Chattel mortgages offer ownership benefits and, if you’re registered, GST claims upfront.
Can I claim GST on a chattel mortgage?
Yes, if your business is GST registered, you can claim the GST on the purchase price in your next BAS, to the extent the asset is used for business. For cars, the GST credit is capped at one-eleventh of the ATO’s car limit. This is one of the key advantages of a chattel mortgage over a lease.
What is a balloon payment?
A balloon payment, or residual value, is a lump sum due at the end of the loan term. It reduces your monthly repayments but means a larger final payment. Not all lenders require one, and your Compare Report will outline each lender’s terms.
How do we get paid?
Comparing costs you nothing. Not comparing can cost you plenty.
The headline rate rarely tells the whole story. Fees, charges and loan terms can add far more to what you repay. That’s why your Compare Report shows every cost we can identify side by side.
In most cases, the lender pays us, and only if you decide to proceed with their product offer. For more complex deals, or where the lender pays us little or nothing, we may charge a fee for our service. It doesn’t happen often, but when it does, it’s shown on your Compare Report and we’ll walk you through it before you decide.
No obligation to proceed, ever.
Related
Read more, or compare a different product.
Guides
See your options, side by side.
No credit file impact · No cost to compare · No obligation
Or talk to us: 1300 161 641 · support@tradefunding.com.au