Master Comparison Table
This is the most comprehensive side-by-side comparison of all four asset finance structures available in Australia. Scroll right on mobile to see all columns.
| Feature | Chattel Mortgage (Commercial Goods Loan) |
Finance Lease | Operating Lease | Novated Lease |
|---|---|---|---|---|
| Ownership During Term | You (borrower) | Financier | Financier | Financier |
| Ownership at End | You (pay balloon if any) | You (pay residual) | Return asset | You (pay residual), return, or re-lease |
| GST Treatment | Claim 100% upfront on next BAS | Claim GST on each payment | Claim GST on each payment | GST included in lease payments |
| Depreciation | Yes — you claim | No | No | No |
| Tax Deductions | Interest + depreciation | Entire payment | Entire payment | Pre-tax salary deduction |
| Instant Asset Write-Off | Yes (eligible as owner) | No | No | No |
| Balloon / Residual | Optional (0–50%) | Mandatory (ATO minimums) | None — return asset | Mandatory (ATO minimums) |
| Monthly Payment Level | Medium–High | Medium | Lowest | Varies (pre-tax) |
| Balance Sheet | On-balance sheet | Potentially off-balance sheet | Off-balance sheet | N/A (employee benefit) |
| ABN Required | Yes | Yes | Yes | No — PAYG employees |
| FBT Applicable | No (business use) | No (business use) | No (business use) | Yes — managed via ECM method |
| Running Costs Included | No | No | Can be bundled | Yes — fuel, rego, insurance, servicing |
| Best For | GST-registered businesses keeping assets long-term | Businesses wanting simple tax & lower payments | Short-term use, fleets, technology | PAYG employees wanting tax-effective vehicle |
| Typical Assets | Trucks, equipment, machinery, utes | Trucks, vehicles, equipment | Fleet vehicles, IT, medical equipment | Cars, utes (employee vehicles) |
| Indicative Rates | From 5.99% p.a.* | From 6.25% p.a.* | From 6.49% p.a.* | From 6.25% p.a.* |
*Rates are indicative only and subject to lender approval, asset type, and credit profile. View current rate ranges →
Not Sure Which One Fits?
Tell us what you're financing and we'll recommend the best structure — free, no obligation.
Get a Free Recommendation →Chattel Mortgage (Commercial Goods Loan)
The most popular structure in Australia. You own the asset from day one, claim the full GST credit on your next BAS, and depreciate the asset in your tax return. Most banks now call this a commercial goods loan — same product, different name.
Pros
- Claim 100% GST credit upfront — cash back in weeks
- Full depreciation claims, including instant asset write-off
- Flexible balloon from 0% to 50%
- You build equity from payment one
- Widest lender panel — the most competitive rates
Cons
- Higher monthly payments if you choose no balloon
- More complex tax: separate interest + depreciation deductions
- Asset sits on your balance sheet (affects gearing ratios)
Read the full Chattel Mortgage guide → | Chattel Mortgage Calculator →
Finance Lease
The financier owns the asset during the term. You make regular lease payments (fully tax-deductible) and pay a residual at the end to take ownership. Simpler tax treatment than a chattel mortgage — one deductible figure per period.
Pros
- Lower monthly payments (mandatory residual reduces principal)
- Simple tax — entire payment is the deduction
- Potentially off-balance sheet (check AASB 16)
- Flexibility at end of term: buy, refinance, or trade
Cons
- No upfront GST credit — claim incrementally on each payment
- No depreciation or instant asset write-off
- Mandatory residual (ATO minimum) — must pay at end
Read the full Finance Lease guide → | Finance Lease Calculator →
Operating Lease
A true rental. The financier owns the asset, you use it, and you return it at the end of the term. No residual to worry about. Ideal for assets that depreciate quickly or that you only need for a fixed period — fleet vehicles, IT infrastructure, medical imaging equipment.
Pros
- Lowest regular payments — no residual or balloon
- 100% off-balance sheet (pure rental)
- Running costs can be bundled into the lease payment
- Walk away at the end — no disposal headaches
- Ideal for assets with rapid obsolescence
Cons
- You never own the asset
- Total cost over time can be higher than other structures
- Less common — fewer lenders offer it
- Usually limited to newer assets with established residual values
Read the full Operating Lease guide → | Operating Lease Calculator →
Novated Lease
A three-way agreement between you (the employee), your employer, and the finance company. Your employer deducts lease payments and running costs from your pre-tax salary, reducing your taxable income. The most tax-effective way for PAYG employees to finance a vehicle.
Pros
- Pay from pre-tax salary — significant income tax savings
- Running costs bundled: fuel, insurance, registration, servicing, tyres
- No ABN required — available to all PAYG employees
- No GST on the purchase price (claimed by the finance company)
- Options at end: pay residual, re-lease, or return
Cons
- FBT applies — managed via Employee Contribution Method (ECM)
- Tied to your employment — if you leave, payments revert to post-tax
- Mandatory residual at end of term
- Only for vehicles (not equipment or machinery)
Read the full Novated Lease guide → | Novated Lease Calculator →
Worked Example: $80,000 Asset Over 5 Years
A GST-registered business finances an $80,000 (ex-GST) asset over 60 months at 6.5% p.a.:
| Metric | Chattel Mortgage (20% Balloon) |
Finance Lease (20% Residual) |
Operating Lease |
|---|---|---|---|
| Upfront GST Credit | $8,000 | $0 | $0 |
| Approx. Monthly Payment | ~$1,370 | ~$1,503 (inc. GST) | ~$1,650 (inc. GST, maintenance bundled) |
| Year 1 Tax Deductions | ~$14,960 (interest + depreciation) | ~$16,240 (payments) | ~$18,000 (payments + running costs) |
| End-of-Term Payment | $16,000 balloon | $16,000 + GST residual | $0 — return asset |
| You Own the Asset? | Yes | Yes (after residual) | No |
Illustrative only — actual figures depend on lender, rate, and asset type. Use our calculator for personalised estimates.
See Your Numbers
Enter your asset price and compare repayments across all structures — takes 30 seconds.
Open Calculator →Which Structure Should You Choose?
| Your Situation | Best Structure | Why |
|---|---|---|
| GST-registered, keeping asset 5+ years | Chattel Mortgage | Upfront GST credit + depreciation + instant asset write-off |
| GST-registered, want simplest tax | Finance Lease | One deductible payment, no depreciation tracking |
| Not GST-registered, ABN holder | Finance Lease | GST advantage of chattel mortgage doesn't apply |
| Fleet vehicles, short-term use | Operating Lease | Lowest payments, off-balance sheet, return at end |
| Technology or equipment you'll upgrade | Operating Lease | No residual risk, walk away at end |
| PAYG employee financing a car | Novated Lease | Pre-tax payments, running costs included |
| Want lowest monthly payment | Operating Lease | No residual reduces outgoing to pure usage cost |
| Want to build equity in the asset | Chattel Mortgage | You own it from day one, payments build equity |
| Maximise tax deductions in Year 1 | Chattel Mortgage | Instant asset write-off + depreciation + interest |