How to Use the Chattel Mortgage Calculator
- Enter your asset price — the purchase price including or excluding GST
- Select "Chattel Mortgage" as your finance structure
- Set your term — typically 3–7 years
- Enter an interest rate — start with 6.5% as a guide
- Add a balloon (optional) — 0–50% to reduce regular payments
- Review results — weekly/monthly repayments, GST credit, Year 1 deductions
What the Calculator Shows You
- Weekly and monthly repayments — principal + interest
- GST credit — the amount you'll claim on your next BAS
- Year 1 interest deduction — tax-deductible interest for the first year
- Year 1 depreciation — based on the asset's effective life
- Total cost over the term — including interest and balloon
All results are estimates for general guidance. Actual terms depend on lender approval. Consult a tax professional for advice specific to your situation.
How the Tax Estimate Works
Understanding the three tax levers behind the calculator helps you verify the numbers and brief your accountant.
If you're registered for GST, you claim 1/11th of the purchase price on your next Business Activity Statement (BAS). The calculator uses: GST credit = purchase price ÷ 11.
For example: $110,000 vehicle → $10,000 GST credit. This isn't a deduction — it's a refund from the ATO, usually received within 28 days of lodging your BAS. It immediately reduces your effective loan cost.
Note: Luxury car tax (LCT) applies to passenger vehicles over the LCT threshold (~$91,387 for 2025–26). The GST component on LCT is not separately claimable. The calculator flags this where relevant.
Under a chattel mortgage, the interest portion of each repayment is a deductible business expense. The calculator uses the standard loan amortisation schedule (PMT formula) to isolate Year 1 interest.
Tax saving on interest = Year 1 interest × your effective tax rate. For a $100,000 loan at 7.5% over 5 years at a 25% tax rate: Year 1 interest ≈ $6,900 → tax saving ≈ $1,725.
The deduction continues each year over the loan term (declining as more of each payment becomes principal).
Instant asset write-off (≤$20,000): If you're an eligible small business (turnover under $10M) and the asset costs $20,000 or less (ex-GST), you claim the full cost in Year 1. Tax saving = asset cost × your tax rate.
Diminishing value (>$20,000): The asset enters the small business depreciation pool. Year 1 deduction = asset cost × 15%. Subsequent years = pool balance × 30%.
Prime cost method (ATO default for non-SBE): Annual deduction = asset cost ÷ effective life (years). The ATO sets effective life for common asset categories — e.g. motor vehicles 8 years, forklifts 10 years, excavators 15 years.
The calculator uses the diminishing value method for small businesses and prime cost for larger businesses, matching ATO guidance. Always confirm with your accountant.