dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

dsl-logo
dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

Background

Best Chattel Mortgage Interest Rates

  • Get the best chattel mortgage interest rates you qualify for from 30+ lenders.

Enter loan amount

$

Chattel Mortgage Interest Rates with Money Matchmaker

Just some of the 50+ business lenders we compare

Why use Money to compare chattel mortgage rates

sale

Get personalised rates

file-check

No credit score impact

phone

Expert help if you need it

Currency dollar circle icon

$200 best match guarantee

What are the best chattel mortgage interest rates?

The best chattel mortgage rates generally start from around 7.50% p.a. but can range up to 15% p.a. or higher for some borrowers. To get the best rate — i.e. the lowest rate — a borrower will want to present as little risk to the lender as possible.

In summary, the best chattel mortgage interest rates are for:

  • Financing brand-new vehicles or assets
  • Business borrowers with a good credit history (you can check your credit score for free before you apply)
  • Businesses with a steady income & trading history
  • Homeowners (i.e. asset-backed borrowers)
  • Borrowers who contribute a deposit towards the loan
  • Shorter loan terms (chattel mortgage terms range from 1-7 years)

According to Money borrower data, the average chattel mortgage amount requested for vehicles is $58,706 and $181,434 for machinery or equipment.

Chattel mortgage interest rates comparison

Chattel mortgage amount

$10,000

Monthly repayments (7.5% p.a. interest rate)

$200.38

Monthly repayments (9.5% p.a. interest rate)

$210.02

Monthly repayments (11.5% p.a. interest rate)

$219.93

Chattel mortgage amount

$20,000

Monthly repayments (7.5% p.a. interest rate)

$219.93

Monthly repayments (9.5% p.a. interest rate)

$420.04

Monthly repayments (11.5% p.a. interest rate)

$439.85

Chattel mortgage amount

$30,000

Monthly repayments (7.5% p.a. interest rate)

$601.14

Monthly repayments (9.5% p.a. interest rate)

$630.06

Monthly repayments (11.5% p.a. interest rate)

$659.78

Chattel mortgage amount

$40,000

Monthly repayments (7.5% p.a. interest rate)

$801.52

Monthly repayments (9.5% p.a. interest rate)

$840.07

Monthly repayments (11.5% p.a. interest rate)

$879.70

Chattel mortgage amount

$50,000

Monthly repayments (7.5% p.a. interest rate)

$1,001.90

Monthly repayments (9.5% p.a. interest rate)

$1,050.09

Monthly repayments (11.5% p.a. interest rate)

$1,099.63

Chattel mortgage amount

$60,000

Monthly repayments (7.5% p.a. interest rate)

$1,202.28

Monthly repayments (9.5% p.a. interest rate)

$1,260.11

Monthly repayments (11.5% p.a. interest rate)

$1,319.56

Chattel mortgage amount

$70,000

Monthly repayments (7.5% p.a. interest rate)

$1,402.66

Monthly repayments (9.5% p.a. interest rate)

$1,470.13

Monthly repayments (11.5% p.a. interest rate)

$1,539.48

Chattel mortgage amount

$80,000

Monthly repayments (7.5% p.a. interest rate)

$1,603.04

Monthly repayments (9.5% p.a. interest rate)

$1,680.15

Monthly repayments (11.5% p.a. interest rate)

$1,759.41

Chattel mortgage amount

$90,000

Monthly repayments (7.5% p.a. interest rate)

$1,803.42

Monthly repayments (9.5% p.a. interest rate)

$1,890.17

Monthly repayments (11.5% p.a. interest rate)

$1,979.33

Chattel mortgage amount

$100,000

Monthly repayments (7.5% p.a. interest rate)

$2,003.79

Monthly repayments (9.5% p.a. interest rate)

$2,100.19

Monthly repayments (11.5% p.a. interest rate)

$2,199.26

Chattel mortgage amountMonthly repayments (7.5% p.a. interest rate)Monthly repayments (9.5% p.a. interest rate) Monthly repayments (11.5% p.a. interest rate)

$10,000

$200.38

$210.02

$219.93

$20,000

$219.93

$420.04

$439.85

$30,000

$601.14

$630.06

$659.78

$40,000

$801.52

$840.07

$879.70

$50,000

$1,001.90

$1,050.09

$1,099.63

$60,000

$1,202.28

$1,260.11

$1,319.56

$70,000

$1,402.66

$1,470.13

$1,539.48

$80,000

$1,603.04

$1,680.15

$1,759.41

$90,000

$1,803.42

$1,890.17

$1,979.33

$100,000

$2,003.79

$2,100.19

$2,199.26

This example compares how different interest rates on a chattel mortgage impact the monthly repayments on various loan amounts. The calculations are based on a five-year loan term.

What impacts chattel mortgage interest rates?

Here are the main factors lenders consider when determining the interest rate on your chattel mortgage. These are general factors that may apply – each lender assesses risk differently based on their own underwriting guidelines.

calendar-check

1. The age of the asset

Chattel mortgage interest rates are generally lower if you buy a new or demo vehicle compared to a used one. Newer vehicles generally have a higher resale value, which is less risky from a lender’s perspective. Brand-new vehicles under 4.5 tonnes will offer the lowest rates.

Based on analysis by Money.com.au, chattel mortgage providers only provide secured finance for vehicles or assets less than 12-15 years old.

truck

2. The type of asset or equipment

Interest rates are generally higher if you’re using a chattel mortgage to finance heavy vehicles, plants, machinery, or equipment. Lenders may charge a 2-6% loading on these assets. This may apply to yellow goods for construction, trailers, medical or dental equipment, and even office and IT hardware.

Secondhand or specialised vehicles or assets typically have less resale demand (e.g. dog wash van, gym equipment) and will come with higher rates as a result.

Currency dollar circle icon

3. Your business revenue & trading history

Established businesses with a consistent income and a track record of successful trading are typically considered less risky, making them eligible for lower interest rates than startups or businesses operating for less than two years.

file-check

4. Your business & personal credit rating

Chattel mortgage providers will generally check your business credit score and the credit rating of your company directors. They will look for the likes of missed payments, defaults and insolvencies (e.g. bankruptcies).

Based on our analysis of various business lending criteria, lenders generally look for a minimum director credit score of 500-600 and a minimum company credit score of 475-500. Having a good credit score may mean you qualify for a lower rate.

Bar chart icon

5. Your business assets & liabilities

When determining your chattel mortgage interest rate, lenders generally consider your business revenue and expenditure, any assets your business already owns (like equipment or vehicles), and current debts. Having fewer liabilities on your business balance sheet relative to assets can qualify you for a better interest rate and higher borrowing amount.

car

6. Whether it’s a dealer or private sale

Most lenders prefer that you buy a business vehicle or equipment from a licensed dealer, as you generally get a statutory warranty with the purchase. You generally don’t get a statutory warranty through a private sale, although the manufacturer’s warranty may still be valid. Some lenders may apply a rate load of 0.50-1% on private sale purchases.

home

7. Whether you’re a homeowner

Business borrowers who own a home (or any residential property) are considered less risky than renters. That’s because homeowners are ‘asset-backed borrowers’ who may have the ability to borrow against their home equity to settle their outstanding debt. Based on Money.com.au borrower data, the majority of business owners applying for a chattel mortgage (58%) own a home.

Borrowers who own a home can generally also borrow more than non-property owners. According to our data, homeowners requested an average chattel loan amount of $117,269, while renters requested an average of $72,385.

How to compare chattel mortgage rates

The best way to compare interest rates on a chattel mortgage is to get personalised quotes from multiple lenders and look at the comparison or 'effective' rate that applies to each option. This is the rate you’ll be paying once all fees have been taken into account.

Sometimes, a slightly higher advertised interest rate with low fees can work out to be cheaper than a lower interest rate with high fees.

Why the lowest chattel mortgage rate is NOT always the cheapest

The answer, as this example shows, is fees...

Chattel mortgage amount

Chattel mortgage 1

$80,000

Chattel mortgage 2

$80,000

Advertised interest rate

Chattel mortgage 1

8% p.a.

Chattel mortgage 2

8.25% p.a.

Application fee

Chattel mortgage 1

$550

Chattel mortgage 2

$0

Monthly account keeping fee

Chattel mortgage 1

$10

Chattel mortgage 2

$0

Comparison/effective rate

Chattel mortgage 1

8.55%

Chattel mortgage 2

8.25%

Loan term

Chattel mortgage 1

5 years

Chattel mortgage 2

5 years

Monthly repayment

Chattel mortgage 1

$1,632.11 (incl $10 monthly fee)

Chattel mortgage 2

$1,631.70

Total to be repaid

Chattel mortgage 1

$98,477

Chattel mortgage 2

$97,902

Cost difference

Chattel mortgage 1

+$545

Chattel mortgage 2

Chattel mortgage 1 Chattel mortgage 2

Chattel mortgage amount

$80,000

$80,000

Advertised interest rate

8% p.a.

8.25% p.a.

Application fee

$550

$0

Monthly account keeping fee

$10

$0

Comparison/effective rate

8.55%

8.25%

Loan term

5 years

5 years

Monthly repayment

$1,632.11 (incl $10 monthly fee)

$1,631.70

Total to be repaid

$98,477

$97,902

Cost difference

+$545

This is a hypothetical example only and is not based on real chattel mortgage products or rates.

How could a balloon payment impact your chattel mortgage interest costs?

Depending on the lender, you may have the option to include a balloon payment as part of your chattel mortgage. This is a residual lump sum due at the end of the loan term to pay the remaining loan balance.

Including a balloon payment in your chattel mortgage reduces your regular repayments, but it will result in paying more interest overall. That’s because you'll be paying interest on the full balloon payment amount over the entire loan term (instead of paying down the full loan amount gradually).

The lower the balloon payment, the less interest you pay. The balloon payment can range from 20-40% of your loan amount, depending on your agreement with your lender.

Businesses may opt for a balloon payment to help preserve cash flow throughout the loan term. You can use our chattel mortgage repayment calculator to estimate the impact of a balloon payment on your repayments and total finance cost.

Ready to compare chattel mortgage rates?

Get your best rates from multiple chattel mortgage providers. There's no obligation and checking your rates won't impact your credit score.

Business loan guides and resources

Learn more about your business finance options and how to get the funding you need to grow your business.

More FAQs about chattel mortgage rates

The interest rate on your chattel mortgage is always relative to your business risk profile when you apply for finance.

You generally must be a prime business borrower to qualify for the lowest interest rate. This includes having a steady income, a solid trading history spanning at least two years and a good credit rating.

Consider engaging a finance broker to ‘shop rates’ and potentially negotiate a better rate on your behalf. Even a 0.15% difference in your rate can significantly impact your overall costs, especially if you’re borrowing a large sum over a 5 or 7-year loan period.

Chattel mortgages have lower interest rates, compared to an unsecured business loan.

The Five Cs of credit is a credit appraisal model lenders use to assess your credit readiness and determine your chattel mortgage interest rate. Here’s what the five Cs stand for:

    circle-green-tick
  1. Character: This is your business’ overall creditworthiness, based on your history of paying back other loans and credit. Lenders will generally put you into a credit category, either as a prime, non-prime or subprime borrower. Credit categorisation varies between lenders.
  2. circle-green-tick
  3. Capacity: This is your ability to repay the loan and your business debt-to-income ratio — the percentage of your business gross monthly income used to pay your monthly debt. Some lenders may also look at liquidity ratios (how quickly you could liquidate assets to repay debts), according to Business Queensland.
  4. circle-green-tick
  5. Capital: This refers to any deposit you contribute towards the payment of the loan. A deposit reduces your debt, and your loan repayments.
  6. circle-green-tick
  7. Collateral: The type of asset securing the debt. With a chattel mortgage, the vehicle or asset is used as collateral for the loan. This means the lender can reclaim the asset if you default.
  8. circle-green-tick
  9. Conditions: These are the terms and conditions attached to the chattel mortgage when you submit your application and during the loan term. For example, the vehicle or asset must be used for business at least 51% of the time. This also includes the different eligibility and application requirements for business owners applying for a chattel mortgage.

Yes, the interest component of your chattel mortgage is tax deductible as a business expense, according to the ATO. You can also claim the GST on the initial purchase as a tax credit on your Business Activity Statement (BAS) for the relevant period and the asset’s depreciation (decrease in value). You can only claim deductions for the business use of the asset (private use will not be deductible).

If you’re financing a vehicle, the GST credit you can claim is capped at 1/11th of the car limit for depreciation set by the ATO each year.

    circle-green-tick
  • For 2023-24, the car limit for depreciation is $69,674.
  • circle-green-tick
  • The maximum amount of GST you can claim during that year is 1/11th of that cost limit — $6,334.

The car limit for depreciation applies to passenger vehicles with less than a 1 tonne load and fewer than nine passengers. It excludes motorcycles or similar vehicles.

The interest rate on a mortgage is usually fixed for the term of the loan, but you may be able to get a variable rate depending on the lender. Businesses usually prefer fixed rates, as it means the rate is locked in for the entire loan term, and repayments are fixed (making it easier to budget for). With a variable chattel mortgage, the rate could go up or down in line with the market.

There are a number of ways you can reduce the repayments on your chattel mortgage:

    circle-green-tick
  • Opt for a balloon payment at the end of the loan term
  • circle-green-tick
  • Contribute a deposit towards your chattel mortgage (reducing your debt and repayments)
  • circle-green-tick
  • Shop for a lower interest rate or consider refinancing your chattel mortgage to a lower rate if you already have one, bearing in mind that early payout fees may apply
Megan Birot Money.com.au writer

Written by

Megan Birot

Megan is a finance writer with more than 10 years of experience in the industry. She’s passionate about helping people make sense of financial topics and principles. She's certified in Finance & Mortgage Broking and is compliant to provide general advice in Tier 1 General Insurance.

Sean Callery Editor Money.com.au

Reviewed by

Sean Callery

Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.

logo

Our Money Promise

Money Pty Ltd (trading as Money) Australian Credit Licence 528698 provides information about credit products and is authorised to do so as the holder of Australian Credit Licence 528698. Money does not compare every Lender all products or issuers available in Australia. We are not a broker or credit provider and when we provide information via this website, we are not providing you with a recommendation or suggestion about a particular credit product.

This material has been prepared by Money Pty Limited (ABN 40 664 954 536) (Money, ‘us’ or ‘we’). Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C). The material is for general information only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with financial or tax advice and does not take into account your objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Money, any of their related body corporates or any other person. To the maximum extent possible, 62C, Money, their related body corporates or any other person do not accept any liability for any statement in this material.

Money Pty Ltd trading as Money

ABN: 42 626 094 773 / ACL: 528698 / AFCA: 83955
Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C)
aboriginal-and-torres-strait

Money acknowledges Aboriginal and Torres Strait Islanders as the traditional custodians of country throughout Australia and their continuing connection to land, waters and community.

© Copyright 2024 Money Pty Ltd.