Finance question
Can I get a first mortgage business loan?
Yes. A first mortgage business loan sits in first position over your property, which is the cleanest and usually the cheapest way to borrow. It reaches the $5 to 6 million range at single-digit rates, with no financials on many deals, sized to your equity.
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The short answer
First position is the cleanest way to borrow
A first mortgage means the lender holds first-ranking security over the property, ahead of anyone else. That happens when the property is unencumbered, or when the new loan pays out the existing mortgage so your lender moves into first position. It is the structure lenders are most comfortable with, which is why it carries the lowest pricing of the property-backed options.
Because the security is clean, the rate lands in single digits, closer to a home loan than to a second mortgage or a caveat loan. The lender is not sitting behind another party, so there is less risk to price for. That first-ranking comfort is also why many of these facilities settle without up-to-date financials.
The funds can be used across the business, from working capital and stock to buying premises, plant or a competitor. What you can borrow is driven by the property value and your equity, not a flat cap, and reaches the $5 to 6 million range that property-backed lending supports.
Do you qualify?
What makes a first mortgage deal work.
Property to secure it
Residential or commercial, held in first position.
Usable equity
Value minus any loan being paid out sizes the facility.
Clean first position
Unencumbered, or the new loan pays out the old one.
An active ABN
Companies, trusts and sole traders all qualify.
Why a first mortgage prices best
First-ranking security
The lender sits ahead of everyone, so there is less risk to price.
Single-digit rates
Clean security means the lowest pricing of the property-backed options.
Light on paperwork
First position means many facilities settle with no financials.
A real example
An owner holds a commercial premises worth $1.5m with an $800k mortgage. A new first-mortgage facility pays out the $800k and releases extra funds on top, all at a single-digit rate, to buy the neighbouring unit. One clean loan in first position. Illustrative only, subject to valuation.
Common questions
Frequently asked questions
What is a first mortgage exactly?
It means the lender holds first-ranking security over the property, ahead of any other lender. It is the cleanest and usually cheapest way to borrow against property.
Can I get a first mortgage if I already have a home loan on the property?
Yes. The new facility can pay out the existing loan so your lender moves into first position, often releasing extra funds on top.
Why is a first mortgage cheaper than a second?
The lender sits ahead of everyone else, so there is less risk to price. That is why first-mortgage pricing lands in single digits.
Do I need financials for a first mortgage loan?
For many deals, no. The clean first-ranking security carries the facility, subject to lender assessment.