Second mortgage loans
Second mortgage business loans against the equity you already have
Borrow behind your existing first mortgage without touching it. Use the equity in your home, investment property, commercial property or development site for a business or development purpose, with settlement typically in days, not the weeks a full refinance takes.
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How it works
How a second mortgage works
A second mortgage is a loan secured behind the one you already have. The first lender keeps first claim on the property. The second lender registers its mortgage in second place, so if the property is sold, the first loan is repaid first and the second loan is repaid from what is left.
That ranking is why a second mortgage costs more than a first mortgage, and why the lender cares about two things above all: how much equity sits behind the first loan, and how you will repay at the end of the term. If you would rather understand how property security changes business lending in general, read borrowing for business against property.
Second-ranking security
Your first mortgage is untouched: same lender, same rate, same repayments. The new lender takes a registered second mortgage, or in some cases a caveat, over the same title.
First lender consent, or not
Most first mortgages require the lender's consent before another mortgage is registered, and getting it is usually the slowest step. If the first lender refuses, a caveat loan may still be possible, at a higher cost.
Combined LVR
Lenders cap both loans together as a share of the property value, typically 70 to 80%. Whatever sits between your first mortgage balance and that cap is the room a second mortgage can use.
Worked examples
How much equity you can actually use
Property value, times the combined LVR cap, minus the first mortgage. The answer is the most a second mortgage can lend, before fees and any prepaid interest.
| Property | Value | First mortgage | Combined LVR cap | Available second mortgage |
|---|---|---|---|---|
| House, BrisbaneOwner-occupied home | $1,500,000 | $650,000 | 75%= $1,125,000 | $475,000 |
| Warehouse, western SydneyOwner-occupied commercial | $2,400,000 | $1,100,000 | 70%= $1,680,000 | $580,000 |
| DA-approved site, Gold CoastDevelopment site | $3,200,000 | $1,400,000 | 65%= $2,080,000 | $680,000 |
Illustrative examples, not quotes. Residential security typically supports the highest combined LVR, commercial property sits a little lower, and vacant land or development sites lower again. Establishment fees, legal costs and any interest prepaid from the advance reduce the cash you actually receive. Run your own numbers in the equity calculator below.
Indicative market bands, September 2026
Typical second mortgage terms
Typical Australian ranges by lender type. Indicative only and subject to lender assessment of the property, the borrower and the exit.
| Lender type | Combined LVR | Typical rate | Fees | Term and interest |
|---|---|---|---|---|
| Non-bank second mortgageLower cost, more paperwork, slower | 70 to 75%residential and commercial | 9 to 14% p.a.lower end needs low LVR and strong security | 1 to 2%establishment, plus valuation and legals | 12 to 36 monthsmonthly interest or capitalised |
| Private second mortgageFastest, priced for speed | Up to 75 to 80%highest on residential security | 12 to 18% p.a.often quoted monthly: 1% a month is 12% p.a. | 1.5 to 3%establishment, plus valuation and legals | 3 to 24 monthsinterest prepaid or capitalised |
| Land or development siteVacant land, DA-approved sites | 50 to 65%higher with DA approval in place | 12 to 18% p.a.mostly private lenders | 2 to 3%establishment, plus valuation and legals | 3 to 18 monthsusually capitalised to the exit |
Interest prepaid
The interest for the term is deducted from the loan at settlement. There are no monthly repayments, but you receive less cash, so size the loan to what you need after costs.
Interest capitalised
The interest is added to the loan balance each month and repaid at the end with the principal. Cash flow is protected, but the balance grows, and so does the amount the exit has to cover.
Bands reflect published Australian non-bank and private lender product pages and market guides as at September 2026. Terms of 3 to 36 months are typical across the market. Every deal is assessed on its own numbers, and the rate you are offered can sit outside these ranges. Ventas does not operate a fixed lender panel for second mortgages; each deal goes to the lenders active in that space at the time.
Choosing the structure
Second mortgage, caveat loan or refinance the first?
Three ways to get at the same equity. The right one depends on the deadline, the first loan and how long you need the money.
| Option | Speed | Typical cost | Security | When it fits |
|---|---|---|---|---|
| Second mortgageKeep the first loan, add a second | Days, once consent and the valuation are in | Typically 9 to 18% p.a. plus fees, on the new money only | Registered second mortgage behind the first | Your first loan has a rate worth keeping, or break costs, and you need a defined amount for a defined term. |
| Caveat loanFastest, least paperwork | Often 24 to 72 hours | Priced monthly, usually the highest of the three | Caveat on the title, no registered mortgage | A real deadline measured in days, a short and certain exit, or a first lender that will not consent. Caveat loans, explained. |
| Refinance the firstOne new, bigger loan | Typically 3 to 6 weeks | Usually the lowest rate, but the whole balance reprices and break costs may apply | New first mortgage over the property | You need the money for years, not months, your current rate is nothing special, and there is time for full paperwork. See property-backed finance. |
What business owners use it for
A defined business or development purpose, a defined amount and a defined way out.
ATO debt
Clear a business tax debt in one payment, stop the interest building and take the pressure off a payment plan.
Working capital
Fund stock, a large contract or a slow debtor cycle without selling the property or touching the first loan.
Deposit on the next site
Use the equity in one property as the deposit on the next, then refinance once the purchase settles.
Bridging a settlement
Settle a purchase on time while the sale of another property, or a refinance, finishes.
A development's equity gap
Top up the equity a construction lender wants to see, or release equity mid-project, like the $29m refinance on our development finance page.
Buying a business or a partner out
Fund a purchase price or a partner's exit against property, where the business alone would not support the loan.
Exit strategy
Every second mortgage needs a way out
Private second mortgages are short-term money. Lenders assess the exit as closely as the borrower, and most will not fund without a clear, dated plan to repay.
Sale
Selling the security property, another asset or completed stock. Lenders want a realistic price and timeline, not the top of the market.
Refinance
Moving the second mortgage, or both loans, onto cheaper long-term debt once the business numbers or a new valuation support it. Start that application early.
Project completion
Repayment from settlement proceeds, a contract payment or a finished build. Allow a buffer for delays, because the interest keeps running.
No exit, no loan
If the exit slips, the costs keep running: extension fees and default interest add up quickly. We test the exit with you before the deal goes to a lender.
Free equity calculator
How much can I borrow on a second mortgage?
Estimate only and not an offer of finance. Assumes the property value is supported by a lender's valuation. The cap a lender applies depends on the property type, location and the exit: residential typically sits at the top of the range, vacant land well below it. Establishment fees, legal costs and prepaid interest usually come out of the advance.
Get my real numbersHonest risks
What can go wrong
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The property is on the line
If the loan is not repaid, the second lender can enforce against the property, including your home if your home is the security.
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Costs compound when the exit slips
Short terms mean extension fees, default interest and fresh legal costs if the sale or refinance runs late.
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Two loans, linked defaults
A default on the second mortgage can put you in default on the first, and the reverse. Both need to stay current.
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Consent and valuation can move
The first lender can refuse or delay consent, and a lower valuation shrinks the equity available. Neither is fully in your control.
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Prepaid interest reduces the cash
When interest is prepaid it comes out of the advance. A $400,000 loan can put noticeably less than $400,000 in your account.
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No consumer credit protections
Business-purpose loans sit outside the National Credit Code, so protections such as responsible lending obligations do not apply.
Business-purpose lending only
Ventas arranges second mortgages for business purposes only: business working capital, business tax debt, buying a business, and funding property development or investment through a business. Lenders will ask you to sign a business purpose declaration.
Loans for personal, domestic or household purposes, such as renovating your home, buying a car or paying off personal debts, are regulated consumer credit. They are not what this page offers, and Ventas does not arrange them.
Second mortgages, Australia-wide
We arrange business-purpose second mortgages against property in every capital city and the major regional centres.
Common questions
Second mortgages, explained
What is a second mortgage business loan?
It is a loan secured by a second-ranking mortgage over property that already has a first mortgage on it. The first loan stays exactly as it is. The second lender sits behind it and is repaid after the first lender if the property is sold. The money is used for a business purpose, such as working capital, business tax debt or a development.
How much can I borrow on a second mortgage?
Most lenders cap the combined LVR, both mortgages together, at typically 70 to 80% of the property's value, and lower for vacant land and development sites. Multiply the value by the cap, then subtract the first mortgage balance. A $1.5m property with $650,000 owing at a 75% cap leaves up to $475,000, before fees and any prepaid interest.
Does my first lender need to approve it?
Usually, yes. Most first mortgages say you cannot grant another mortgage over the property without the lender's consent, and most second mortgage lenders want that consent before they register. Some first lenders consent within days, others take weeks or refuse. Where consent is refused, some private lenders will lend on a caveat instead, which is weaker security and priced higher.
How fast can a second mortgage settle?
Private lenders can typically approve within 24 to 48 hours of a complete application, then settle in about 3 to 10 business days once the valuation and the first lender's consent are in hand. Consent is usually the slowest step. Non-bank lenders take longer, typically 2 to 4 weeks. Either way it is usually faster than refinancing the whole first mortgage.
What does a second mortgage cost?
It depends on the lender type and the combined LVR. Non-bank second mortgages typically run 9 to 14% p.a. and private second mortgages typically 12 to 18% p.a., higher on complex security. Establishment fees are typically 1 to 3% of the loan, plus valuation and legal costs. Interest is often prepaid or capitalised, so compare the total cost, not just the rate.
Can I use a second mortgage to pay ATO debt?
Yes, if it is a business tax debt, and it is one of the most common reasons. With property behind it, lenders will fund tax debt that unsecured lenders will not. Expect them to ask for the ATO statement of account, any payment arrangement and evidence that lodgements are up to date. Clearing the debt also stops the ATO's interest charges building on it.