Master Comparison Table
This is the most comprehensive side-by-side comparison of all three asset finance structures available in Australia. Scroll right on mobile to see all columns.
| Feature | Chattel Mortgage (Commercial Goods Loan) |
Finance Lease | Operating Lease |
|---|---|---|---|
| Ownership During Term | You (borrower) | Financier | Financier |
| Ownership at End | You (pay balloon if any) | You (pay residual) | Return asset |
| GST Treatment | An eligible credit may be available upfront to the creditable business-use extent | Eligible credits may arise with lease payments | Eligible credits may arise with lease payments |
| Depreciation | The business may claim eligible depreciation | The lessor generally claims tax depreciation | The lessor generally claims tax depreciation |
| Tax Deductions | Eligible business-use interest and depreciation may be deductible | The eligible business-use portion of payments may be deductible | The eligible business-use portion of payments may be deductible |
| Instant Asset Write-Off | May be available if the law and all eligibility tests are met | Generally not claimed by the lessee as non-owner | Generally not claimed by the lessee as non-owner |
| Balloon / Residual | Optional; lender and asset limits apply | Contractual residual; tax guidance may affect its setting | Return conditions and end-of-term charges may apply |
| Scheduled Payment Pattern | Varies with deposit, term and balloon | A residual can reduce scheduled payments but increases the end obligation | May be lower where the lessor retains residual risk; total cost varies |
| Accounting Treatment | Usually recognised as an asset and liability | Depends on the contract and reporting framework; AASB 16 generally brings leases onto the balance sheet for lessees, subject to exemptions | |
| ABN Required | Yes | Yes | Yes |
| FBT Applicable | Depends on the vehicle, availability for private use, employer arrangement and any exemption | ||
| Running Costs Included | No | No | Can be bundled |
| Consider When | Ownership and long-term retention matter | A defined residual and eventual ownership option fit the replacement cycle | Return flexibility, fleet rotation or bundled services matter |
| Typical Assets | Trucks, equipment, machinery, utes | Trucks, vehicles, equipment | Fleet vehicles, IT, medical equipment |
| Editorial planning range | 6.29%–9.49% p.a.* | 6.79%–10.49% p.a.* | 7.49%–10.99% p.a.* |
*Editorial planning ranges checked 9 August 2026. They are not quotes, offers or comparison rates. Pricing depends on lender, asset, term, security and applicant profile. View rate methodology and current ranges →
Not Sure Which One Fits?
Tell us what you're financing and we'll compare structures against your asset, cash-flow and ownership priorities. Tax and accounting treatment should be confirmed with your advisers.
Request a Structure Comparison →Chattel Mortgage (Commercial Goods Loan)
The most popular structure in Australia. You own the asset from day one, may be able to claim an upfront GST credit to the extent allowed 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
- An eligible GST credit may be available upfront to the creditable business-use extent
- Eligible business-use interest and depreciation may be deductible
- A balloon may be available within lender and asset limits
- You build equity from payment one
- Commonly offered for vehicles and income-producing equipment
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 (potentially deductible, subject to current tax law and the taxpayer’s circumstances) 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 — eligible business-use portion may be deductible is the deduction
- Potentially subject to contract-specific accounting (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 complete Finance Lease Australia 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
- Accounting treatment depends on the contract and reporting framework
- 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 →
See Your Numbers
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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, subject to contract-specific accounting, return at end |
| Technology or equipment you'll upgrade | Operating Lease | No residual risk, walk away at end |
| 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 |