Private lending › Second mortgages
Second mortgage loans
in Australia.
Release the equity in your property without refinancing the loan you already have. A second mortgage sits behind your existing lender and leaves your current rate untouched.
Get indicative terms
Same day, in writing. No credit check to enquire.
Mechanics
How a second mortgage works
- You have equityProperty worth $X, first mortgage of $Y. The difference is what a second mortgage lends against.
- The lender assesses the combined positionBoth loans added together, divided by the property value, giving the combined LVR. Our panel goes to 80%.
- Your first mortgagee consentsMost standard mortgages require the first lender's consent to a second registration. We manage that request.
- The second mortgage is registeredAnd funds are released.
Worked example
Illustrative only. Actual lending depends on valuation, security type, location, the strength of the exit and lender assessment.
Use cases
Why take out a second mortgage?
Four situations account for most of the second mortgages we place, and one where we'll tell you not to bother.
Keep the rate you have
The most common reason. Refinancing to release equity means repricing your entire debt at today's rates and wearing any break costs on a fixed facility. A second mortgage leaves the first loan exactly as it is.
Speed
A refinance is a full application to a new lender, which takes weeks. A second mortgage assessed on equity and exit moves considerably faster.
Servicing doesn't stack up
Where a bank's calculator won't support a larger first mortgage, a second mortgage assessed on security and exit can still work.
The purpose is time-limited
A tax bill, a settlement shortfall, a construction cost overrun, a business opportunity with a deadline. Restructuring long-term debt to solve a six-month problem is the wrong tool.
When not to
If there is no clear event that repays it, a second mortgage is the expensive answer and refinancing properly usually beats it. We'll tell you if that's what we think. Placing a loan that can't be repaid isn't good for anyone in the chain.
The security
The equity is already there.
A second mortgage is how you reach it without unwinding the loan you have. Most of the security we place against is standing residential property that has simply appreciated past its existing debt.
Purpose of funds
What a second mortgage can be used for
Because the loan is assessed on the security and the exit rather than a servicing calculator, the range of acceptable purposes is far wider than a bank's. These are the uses we see most often.
Business & investment
Property related
Not listed here? Ask. If the security holds and the exit is clear, there is usually a lender for it.
Terms
Second mortgage parameters
Priced against combined LVR, the strength of the exit, the property type and its location. Metropolitan residential security at a modest combined LVR sits at the bottom of the range. Regional or specialised commercial security at a high LVR sits at the top.
| Rates | From 7.99% p.a. |
|---|---|
| Establishment fee | From 0.75% |
| Term | 3 – 60 months |
| Maximum combined LVR | Up to 80% |
| Loan size | From $200,000 |
| Locations | All of Australia |
| Indicative terms | Same day |
Application
What we need from you
No tax returns. No BAS. No servicing calculator.
FAQ
Frequently asked questions
What is a second mortgage?
A second mortgage is a loan secured by a property that already has a mortgage on it. Your existing lender keeps first position on the title and the new lender registers in second position behind them, meaning it is repaid only after the first mortgage is satisfied in a sale or default.
Because the second lender carries that subordinate risk, second mortgages are priced above first mortgages. The advantage is that they can be arranged without disturbing a first mortgage you would rather keep, which matters if you hold a rate you cannot replace or a fixed loan with a break cost.
How can I get a second mortgage?
You need enough equity in the property, a combined LVR within the lender's limit (up to 80% across our panel), a credible repayment plan, and your first mortgagee's consent to register a second interest. Servicing income is generally not assessed for business-purpose loans.
How does a second mortgage work in practice?
The lender values the property, adds the existing debt to the proposed new loan to calculate the combined LVR, obtains the first mortgagee's consent, and registers a second mortgage on the title. Funds are released at settlement and repaid at the end of the term from the agreed exit.
What can a second mortgage be used for?
Common uses include ATO debt, working capital, business cash flow, business expansion or acquisition, franchise and inventory purchase, equipment and plant, debt consolidation, settlement shortfalls, investment capital, joint venture contributions, share purchases and divorce settlements. Property purposes include renovations and refurbishment, development costs, DA and planning costs, infrastructure contributions, deposits for a new purchase, and land banking.
Can I get a second mortgage with bad credit?
Usually yes. Second mortgage lending is assessed on equity and exit rather than credit score. Defaults, judgments and ATO debt affect pricing and maximum LVR rather than eligibility outright.
What is a good rate for a second mortgage?
Second mortgages are priced above first mortgages because of the subordinate position. Rates across our panel start from 7.99% p.a. and move with combined LVR, security type and the strength of the exit. Compare the total cost of the facility over its full term, meaning interest plus establishment, legal and valuation fees, rather than the headline rate alone.
Why would someone take out a second mortgage instead of refinancing?
To preserve an existing first mortgage. Refinancing means repricing the whole debt at current rates and potentially paying break costs on a fixed loan. A second mortgage accesses the equity while leaving the original facility untouched, and settles considerably faster.
Does my current lender have to approve it?
In most cases, yes. Standard mortgage terms require the first mortgagee's consent before a second mortgage can be registered. We prepare and lodge the request as part of the process. Where consent is refused or too slow, a caveat loan is sometimes an alternative.
How much can I borrow on a second mortgage?
Up to 80% of the property's value including your existing first mortgage, from $200,000.
Enquire
Find out what your equity can do.
Indicative terms the same day. No credit check to get a quote.
Prefer to talk it through? Call 0478 715 429.