What a second mortgage costs for a business loan in Australia

Published second mortgage rates start between 9.95% and 15% p.a., and one guide puts typical residential pricing at 12% to 18% p.a. On $150,000 that is about $18,000 to $27,000 a year in interest (our arithmetic), plus establishment and legal fees. Combined LVR caps run from 65% to 75%.

A second mortgage lets a business owner borrow against a home that already has a home loan, without touching that home loan. The price is higher than the first mortgage because the second lender is repaid second if the property is sold. There is no standard rate card, and some lenders publish only a 'from' rate or no fees at all. This guide sets out what nine lender and broker pages publish, what that costs in dollars on a $150,000 advance, how the combined LVR limits the amount, what the first lender's consent adds, and how a second mortgage compares with a caveat loan or refinancing the whole home loan.

What second mortgage lenders publish

There is no standard rate card for second mortgages in Australia. These are private and non-bank loans, so pricing is set lender by lender and often per deal. The table below sets out what each page says, and where a page does not publish a figure the cell says so. Most quote a "from" rate, which is a starting point for a low-risk deal and not what most borrowers pay. Types are as the page presents itself. Business Bridging Loans says its second mortgage product is delivered in collaboration with Secured Lending and shows the same rates and the same $2m cap, so treat those two rows as one data point. Prime Finance's larger tiers quote a margin over the RBA cash rate with a floor, so their rate moves with the cash rate.

Two things stand out. Starting rates run from 9.95% to 15% p.a. across the lenders,, and one intermediary guide (Innovate Funding) puts typical residential pricing at 12% to 18%, so assume the middle of that band rather than the lowest figure. Fees are the second cost: establishment ranges from 0.825% on one lender's page to "up to 10%" on a broker page for urgent deals. Goodland Capital lists 2nd mortgages as accepted on FlexiBiz but does not publish a second mortgage rate, so its 8% p.a. is a product-level starting rate, not a second mortgage rate.

What a second mortgage costs in dollars

Most second mortgage lenders quote an annual rate on a short term, and many take interest prepaid or capitalised rather than as monthly repayments. Our arithmetic on a $150,000 advance:

• 12% p.a.: $18,000 a year, $1,500 a month.
• 15% p.a.: $22,500 a year, $1,875 a month.
• 18% p.a.: $27,000 a year, $2,250 a month.

Add establishment (for example 0.825% to 2.2% on Semper's page is $1,238 to $3,300 on $150,000), legal costs, a valuation and any first lender fee. Innovate Funding shows legal at $2,500 to $5,000, and Switchboard shows a $4,000 to $6,000 minimum for lawyers on both sides, so plan on several thousand dollars before the first interest bill. These are indicative, and your letter of offer is what counts.

Combined LVR: how much you can borrow

A second mortgage is sized on the combined LVR, the first loan plus the new advance divided by the property value. The published caps in the table run from 65% to 75%, and the lender's valuation, sometimes a forced sale value, can come in below what you expect. On a $900,000 home with a $450,000 first mortgage, 70% allows $630,000 total debt, so a second of up to $180,000. At 65% the second tops out at $135,000, below the $150,000 in the example. Check the cap on the specific product before you plan around it.

First lender consent and the deed of priority

Whether the first lender must agree depends on the state, and older commentary differs from newer. Brans Groves, a law firm, sets out the position as: no consent needed in NSW since 11 October 2021, Queensland and Western Australia (a ban on second mortgages in the first mortgage is void in Queensland under s 78 of the Land Title Act), none for ACT; Victoria needs title nomination from the first mortgagee through PEXA, which the first lender cannot refuse but can treat as a default, so a deed of priority is usually needed in practice; Tasmania and the Northern Territory need the first lender's cooperation where a paper title is on issue. A 2017 NSW article from Surry Partners says consent was then usually needed and came with a deed of priority, extra legal cost and delay, which shows why the date of any commentary matters. Alphacon's page says consent is usually by deed of priority and runs in parallel with the application, and Secured Lending's page says the first mortgage holder must consent. Where a deed of priority is needed, expect fees from both lenders' lawyers and extra days. Some lenders use a caveat instead, which needs no consent but costs more and is shorter. Ask your solicitor which applies to you.

Government charges are small beside the lender's fees. PEXA's Victorian price list, effective from 1 July 2026 and including GST, shows a mortgage at $55.99 for a single title ($77.00 for multiple titles), and a discharge of mortgage at $27.39 ($43.01). A priority notice is $12.65. State titles office lodgement fees are separate and vary by state, so ask your conveyancer for the total.

Who borrows this way, and the business purpose rule

Owners usually use a second mortgage to buy a business, fund equipment or stock, open a second site or clear an ATO debt, with a home or investment property as security. The funds must be for business. ASIC's National Credit Code page says the code covers credit provided wholly or predominantly for personal, domestic or household purposes, or to buy or improve residential investment property. ASIC's guidance is that credit is regulated when it is mainly for personal, domestic or household purposes, and that a borrower's declaration is not conclusive if the lender had reason to doubt it. Several lenders above also require a company or trust borrower. If any of the money is going to personal use, tell the broker at the start. Where tax matters, such as the deductibility of interest, ask your accountant.

Financing a second mortgage: the three options compared

For an owner with a home loan that stays in place, the usual path to business funds is a second mortgage from a non-bank or private lender. The lenders on the published pages above are private and non-bank lenders. Most of these lenders price off the combined LVR, the property type and location, the exit and the borrower. There is no standard schedule, which is why the published pages above start at different points. Ventas is a finance broker, not a lender, so none of these figures is a Ventas offer.

Illustrative only, subject to lender assessment. An owner has a $900,000 home with a $450,000 home loan and needs $150,000 for the business:

And how the three common routes compare on that same $150,000:

The refinance can win when the existing home loan is dear or near its end anyway, or when the business needs more than a second lender will release. The second mortgage tends to win when the current home loan rate is low, when it carries a fixed rate that would cost to break, or when the funds are needed for a year or two. A caveat loan only makes sense with a defined exit inside a few months.

Lender appetite is narrow. Most second mortgage lenders want a clear exit (a refinance, a sale, a settlement), a combined LVR at or under 70% to 75%, and a company or trust borrower with a business purpose. Several pages above say interest is prepaid or capitalised, so servicing is not assessed in the usual way, but the exit is. A first mortgage that is behind on repayments, or a property in a regional or specialised market, narrows the field quickly.

Business purpose matters. If the funds go to the business, the loan is generally outside consumer credit rules, but ASIC says a signed declaration is not conclusive: it does not help where the lender knew or had reason to believe the funds were for personal or household use. Borrowing for personal use is regulated consumer credit and is not covered here.

On consent, the position depends on the state. A law firm commentary says first mortgagee consent is no longer legally required to register a second mortgage in most jurisdictions, with Victoria the exception, where the incoming lender needs title nomination via PEXA from the first lender. Many first lenders still ask for a deed of priority, and Innovate Funding says consent is the most common failure point. Allow for this in your timeline and ask your solicitor.

To get a number from Ventas, send the property address and value, the balance and lender of the home loan, the amount and purpose, the borrower (individual, company or trust), and the exit. See second mortgage business loans, property-backed business lending, borrowing against property for business and a second mortgage for business. Finance is subject to lender assessment and approval.

This is general information only and not financial, credit, or tax advice. Figures are indicative market data from the sources listed, not Ventas offers, and move with the market. Consider your own circumstances and speak to a professional. All finance is subject to lender assessment and approval.

This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.