Start With the Ownership Decision
| Question | A chattel mortgage may fit when… | Pause and compare alternatives when… |
|---|---|---|
| Who should own the asset? | Your business wants legal title from settlement | You want use of the asset under a lease or managed replacement cycle |
| How long will you keep it? | The finance term broadly matches the useful ownership period | You expect to replace it early or the asset may become obsolete quickly |
| Can you manage the balloon? | The balloon is zero or supported by a credible payout, sale or refinance plan | The balloon exceeds a conservative expected asset value |
| Is the total cost clear? | You have the rate, fees, repayment schedule, balloon and early-payout terms | Only a headline rate or repayment has been supplied |
Finance eligibility and tax eligibility are different tests. A lender approval does not establish a GST credit or income-tax deduction.
What Is a Chattel Mortgage?
A chattel mortgage is a common Australian business asset finance structure used for vehicles, trucks, equipment and machinery.
The name comes from two legal terms: chattel means a movable asset (as opposed to land or buildings) and mortgage describes the security arrangement — the lender holds a registered charge over the asset until you repay the loan in full.
In plain terms: you choose the asset, the lender funds it, and you own it from day one. You make fixed repayments over 2–7 years. Once the loan is paid, the lender discharges the mortgage and you own the asset outright — free and clear.
Also Called: Commercial Goods Loan
Some lenders use names such as "commercial goods loan" or "business loan – goods" for secured asset finance with a similar ownership structure. Product terms, security, fees and tax treatment can still differ, so compare the actual contract rather than relying on the label.
Why Businesses Consider It
Ownership from settlement can create useful cash-flow and tax outcomes, but each benefit is conditional on eligibility and business use:
How a Chattel Mortgage Works — Step by Step
New or used vehicle, truck, equipment, or machinery — dealer or private sale
Use the chattel mortgage calculator to model asset price, term, rate and balloon
Provide the asset, seller, business and evidence details needed to review relevant pathways
A licensed broker compares relevant accredited lenders; this is not a whole-of-market comparison
Timing depends on lender policy, application completeness and any valuation, identity or seller checks
After approval and signed documents, the lender pays the vendor and records its security over the asset
Information to Prepare and the Settlement Sequence
A complete chattel mortgage application is a transaction file, not just an ABN and a repayment estimate. Prepare the correct purchaser details, identity and entity information, asset quote or invoice, seller information, business-use context and the financial evidence requested for the application.
Before assessment
- Align borrower, purchaser, invoice and intended owner.
- Identify any private sale, existing payout, trade-in or specialised attachment.
- Describe mixed business and private use accurately.
- Use the secure channel supplied for requested sensitive documents.
Before settlement
- Satisfy identity, asset, seller, valuation and insurance conditions.
- Read the fees, security, guarantees, balloon and payout method.
- Verify payment details independently.
- Retain the invoice, contract and PPSR records.
See the full asset finance application checklist. A conditional outcome is not an approval, and an approval may still contain conditions that must be met before settlement.
Chattel Mortgage Rates 2026
Planning inputs checked 9 August 2026 • Not lender offers, settled-loan averages or comparison rates. Fees are excluded and actual pricing may fall outside these ranges.
| Asset Type | New | Used |
|---|---|---|
| Cars & utes | 6.29% – 9.49% | 7.49% – 11.49% |
| Trucks & prime movers | 6.29% – 10.49% | 7.49% – 13.49% |
| Equipment & machinery | 6.99% – 11.49% | 8.49% – 14.99% |
| Agricultural equipment | 6.99% – 12.49% | |
| Medical & dental | 6.49% – 9.99% | 8.49% – 12.49% |
Full rates guide — methodology, pricing factors and total-cost comparison →
Chattel Mortgage vs Other Finance Structures
Not sure which structure fits your business? Here's how chattel mortgage compares at a glance.
Chattel Mortgage vs Finance Lease
- ✓ You own the asset from day one
- ✓ Potential eligible GST credit
- ✓ Potential business-use depreciation
- ✓ Balloon is optional (your choice)
- ✓ Ownership flexibility, subject to lender security
- — Lender owns the asset during term
- — GST credits generally follow taxable lease charges
- — Financier is generally the tax owner
- — Residual and end options depend on the lease contract
- — A residual purchase is a separate transaction
Chattel Mortgage vs Hire Purchase
- ✓ Ownership from settlement
- ✓ Lender registers charge on PPSR
- ✓ Balloon is purely optional
- ✓ More lenders available
- — Technically lender owns during term
- — Ownership transfers at final payment
- — Similar tax treatment
- — Less commonly offered today
Who Can Use a Chattel Mortgage?
Australian sole traders, companies, trusts and partnerships can apply when the transaction has a genuine business purpose. Lenders then assess the applicant, cash flow, asset, seller, contribution, credit profile and supporting evidence. Business-use percentages matter separately for tax and GST apportionment.
Sole trader guide →
Common Evidence Pathways
| Assessment area | Common evidence | What varies by lender |
|---|---|---|
| Business identity and history | ABN/ACN, entity details and relevant industry experience | Minimum trading period and acceptable entity types |
| Cash flow and serviceability | Bank statements, BAS, financial statements or tax returns where required | Low-doc thresholds, recency and verification method |
| Asset and seller | Invoice or quote, serial/VIN details, condition and seller identification | Maximum age, private-sale policy, valuation and inspection rules |
| Transaction structure | Price, deposit or trade-in, term and proposed balloon | Maximum exposure, LVR, balloon and term |
| Applicant conduct | Credit file and existing commitments when formally assessed | Scorecard, adverse-credit tolerance and guarantees |
There is no universal “prime” ABN age, minimum loan or maximum asset age. Treat any fixed threshold as lender-specific until confirmed for the transaction.
Request a Chattel Mortgage Review
Prepare a lender-ready enquiry for review. No lender submission or credit enquiry is made without your authorisation.
What Can You Finance With a Chattel Mortgage?
Any movable business asset used primarily for income-earning purposes. Common categories:
Trucks & Prime Movers
Kenworth, Volvo, Scania, Freightliner, Isuzu, Hino
Utes & Commercial Vehicles
HiLux, Ranger, Amarok, LandCruiser
Excavators & Earthmoving
Mini, mid-range & large excavators
Forklifts
Toyota, Hyster, Crown — electric or LPG
Agricultural Equipment
John Deere, Case IH, New Holland, Kubota
Construction Equipment
Bobcat, JCB, Caterpillar, Manitou
Hospitality Equipment
Commercial kitchens, refrigeration, POS
Medical & Dental
Imaging, chairs, diagnostic equipment
Frequently Asked Questions
More questions? Visit the full FAQ library with 30+ answers →
It's a business loan where you own the asset (car, truck, equipment) from the moment it's purchased. The lender holds a registered charge over it as security — similar to how a home mortgage works, but for movable assets. Once you repay the loan in full, the charge is removed.
Often the terms describe a similar secured business asset finance structure, but they are not a guarantee that every contract is identical. Compare ownership, security, fees, GST treatment, balloon options and payout terms in the lender's written offer.
A newer business can apply, but an ABN start date does not create an entitlement to finance. Assessment can place more weight on the directors' experience, current cash flow, contracts or work pipeline, asset quality, contribution and supporting evidence. Options, pricing and required documents vary by transaction.
Not necessarily. The available contribution requirement depends on the applicant, asset, seller, amount, term, balloon, evidence and lender policy. A contribution reduces the amount financed and may reduce negative-equity risk, but it does not guarantee approval or a lower rate.
Used assets may be considered, but there is no universal age cut-off. Asset type, age at the end of term, condition, hours or kilometres, service history, seller, market value and remaining useful life can affect the term, evidence and pricing.
Timing varies by lender, transaction and application completeness. A straightforward application can move quickly, while private sales, older assets, low-documentation files, trusts or larger transactions can require additional checks. Treat any timing estimate as indicative until a lender confirms its process.
Yes. Most chattel mortgages allow early repayment. Some lenders charge an early termination fee (typically 2–3 months' interest). Ask your broker to confirm the break cost before you sign. If you're selling the asset, the payout figure includes any fees.
You pay the final regular repayment (or any balloon amount), the lender discharges the PPSR mortgage, and you own the asset outright. No inspection, no mandatory purchase — you already own it. You can keep using it, sell it, trade it in, or use it as security on future finance.