What is the difference between chattel mortgage and finance lease?

With a chattel mortgage you own the asset from day one and the lender holds a registered charge over it. You claim GST on the full purchase price upfront and depreciate the asset each year. With a finance lease, the lender owns the asset during the term and you make lease payments — which are fully tax-deductible as business expenses. At lease end you can pay a residual to take ownership. Chattel mortgage suits businesses wanting ownership and maximum tax control; finance lease suits those wanting lower payments and fully deductible costs.

Which asset finance structure gives the best tax deduction?

For small businesses purchasing assets under $20,000, a chattel mortgage combined with the instant asset write-off gives the largest immediate deduction — potentially the full asset cost in Year 1. For assets over $20,000, finance lease payments are fully deductible each year, which can be more tax-efficient than chattel mortgage depreciation over the loan term. Use this calculator to compare the net after-tax cost for both structures.

Can I claim GST on asset finance?

Yes, if you are GST-registered. Under a chattel mortgage, you claim the full GST on the purchase price as an input tax credit on your next BAS. Under a finance lease, GST is added to each lease payment and you claim it progressively on each BAS. Under an operating lease, GST is included in the monthly payment and claimed each period.

What interest rates should I enter in the calculator?

For a broad estimate in 2026, try 7.0%–8.5% for new equipment chattel mortgage with an established business, 8.0%–10.0% for used equipment, and 9.0%–12.0% for start-up or lower-doc scenarios. Our licensed brokers can provide an exact rate quote after a quick assessment — use the Get a Quote button for a personalised rate.

Does the calculator show the real after-tax cost?

Yes. After entering your tax rate and GST registration status, the calculator shows your net Year 1 after-tax and after-GST-credit cost for each structure. This is the true out-of-pocket number that accounts for GST refunds, interest deductions, and depreciation or instant write-off — giving you a fair comparison between structures.