Chattel Mortgage Interest Rates

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What are the best chattel mortgage rates?

The best current chattel mortgage interest rates in Australia are fixed between 4.00% - 6.00%. The interest rate applied to your chattel mortgage will depend on the lender you choose to apply with and what type of asset you are wishing to finance.

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Best Chattel Mortgage Interest Rates in Australia

Asset New or Used Loan Term Loan Amount Interest Rates
Under 4.5 tonne New 3 years $30,000 4.79%
Under 4.5 tonne Used 3 years $30,000 5.90%
Over 4.5 tonne New 5 years $30,000 4.39%
Over 4.5 tonne Used 5 years $30,000 5.50%

When applying for a chattel mortgage, check to see which types of vehicles a lender will finance. For example, some lenders may only finance vehicles less than five years old. The best chattel mortgage rates will be offered on brand-new vehicles.

Chattel Mortgage Vehicle Age versus Interest Rates

Vehicle Age Interest Rate Fees
Brand-New 4.00% $0
5 years old 6.00% $500
12 years old 7.00% $1,500


A fixed-term interest rate on a chattel mortgage means any changes to lender interest rates during the loan period will not affect your repayments.

A person using their hands to look through loan documents

How do I qualify for the best rate on a chattel mortgage?

Interest rates reflect the level of risk your borrowing presents to a lender. The lower the risk, the lower the interest rates — if you have a good credit history and a high income, you’ll present less risk to a lender than someone with a poor credit history and low income.

Other factors that impact the interest rate applied to your chattel mortgage include:

  • The amount you wish to borrow
  • The type of vehicle
  • The age of the vehicle
  • The length of your loan
  • Your credit history
  • Your net income
  • If you own a property

How lenders assess your chattel mortgage application

  • Credit rating — A list of defaults, judgements, bankruptcies and related information, and is usually retained for a period of seven years.
  • Capacity — Your ability to repay the loan from an assessment of your income and your current debts.
  • Capital — Any deposit put toward the purchase of the vehicle. A deposit reduces the debt, and therefore the risk to a lender.
  • Collateral — This is any asset that is used to secure the debt — in a chattel mortgage, this is the vehicle you finance.
  • Conditions — The health of your business and what you’ll use the funds for. Lenders may also look at industry trends and anything that may affect your ability to repay the loan.

A chattel mortgage will have a lower interest rate than an unsecured personal loan. The vehicle you purchase will function as security, which means risk to the lender is reduced.

What do I need to apply?

There are two types of application for a chattel mortgage: streamlined and standard. A streamlined application is the industry term for the simplest type of deal. The type of application will depend on the value of vehicle or vehicles you wish to finance, your time in business, and your credit rating.

  • If you want to finance a vehicle up to the value of $150,000 and have been in business 12 months or more, you’ll most likely go qualify for the streamlined application process.
  • If you want a chattel mortgage for a vehicle or vehicles greater than $150,000, or have been in business less than 12 months, you’ll need to go through the standard application process.

You can still get a low interest rate through either application process. The rate you are offered will still be determined by the level of risk you present to a lender.

How do I apply?

Most banks will offer a chattel mortgage, however you’ll find extremely competitive rates from specialist asset finance lenders, or by working with a finance broker. A finance broker will generally make it a lot easier for you than a bank. Often, non-bank lenders will also provide a simple, online application process and sometimes pre-approval.

You can learn more about the different ways to apply by reading our Chattel Mortgage Guide.


Specialist Asset Finance lenders offer a streamlined application process and competitive interest rates, which often makes them more appealing to borrowers than banks.

Professional woman holding balloons

Can a balloon payment lower my interest rate?

Chattel mortgages can be set up to include a balloon amount, which results in lower scheduled repayments at the cost of a higher final payment. Accepting a balloon payment will not give you a lower interest rate, it will only lower your monthly repayment amount due to a large, final payment.

If you choose a balloon payment on your chattel mortgage, you will need to either pay the amount at the end of your finance agreement, or refinance the remaining amount into a new loan.

Chattel Mortgage Balloon Payment Calculation Table

Loan Type Loan Amount Loan Term Balloon Amount Interest Rate Monthly Repayments
Chattel Mortgage $50,000 5 years $0 6.00% $966.64
Chattel Mortgage $50,000 5 years $20,000 6.00% $679.98

Important: This is a hypothetical calculation as an illustration of how balloon payments affect monthly repayment amounts.

How can I compare interest rates for a chattel mortgage?

If you really want to get the best interest rate on a chattel mortgage, you’ll need to look at the comparative interest rate — i.e. the actual interest rate once all fees have been taken into account. Sometimes, a slightly higher advertised interest rate can work out to be cheaper than a lower interest rate, once all fees have been taken into account.

You can see in the table below how important it is to work out the actual interest rate you’ll be paying on your loan — it could save you thousands!

Lowest Rates are NOT always the Cheapest Rates

Chattel Mortgage 1 Chattel Mortgage 2
Amount $30,000 $30,000
Advertised Interest Rate 5.00% 5.50%
Application Fees $500 $0
Monthly Fees $10 $0
Term (Length) 5 years 5 years
Monthly Repayment Amount $585.57 $573.03
Actual Interest Rate 6.40% 5.50%
Total Amount to Repay $35,134.20 $34,381.80

Use our free chattel mortgage calculator to quickly create a personalised repayment assessment.

Chattel Mortgage Interest Rates Summary

The best chattel mortgage rates in Australia are currently between 4.00% and 6.00% and are fixed for the term of the loan. To get the best — i.e. 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 offered on brand-new vehicles
  • Are offered to borrowers with a good credit rating
  • Are offered to borrowers with a high income and job stability
  • Are not affected by a balloon payment.
  • May not be the best choice if there are high fees attached.
  • Are usually offered by non-bank lenders or finance brokers.

Chattel Mortgage Interest Rates FAQ

What is the interest rate for a chattel mortgage?

Interest rates for a chattel mortgage are usually fixed between 4.00% and 6.00%. Interest rates will vary for chattel mortgages depending on the type and age of asset you are wishing to purchase. Brand-new vehicles under 4.5 tonne will offer the lowest rates.

How do I get the lowest repayments?

You can get lower repayments with a balloon amount. A balloon payment is a residual amount paid as a lump sum at the end of your chattel mortgage agreement. A balloon payment can reduce the amount you’ll pay on regular repayments, but it will not give you a lower interest rate.

How do I get the lowest rate?

Chattel mortgage interest rates are relative to the risk-level of the borrower. Lenders assess risk by looking at a borrower’s credit rating, ability to repay the loan, any deposits or security provided on the loan, and the financial strength of your business. The lower your risk level, the lower the interest rate offered.

Is the advertised rate the best way to compare offers?

To compare interest rates on a chattel mortgage and get the best rate for your situation, you’ll need to look at the comparative rate instead of the advertised rate. Unlike the advertised rate, a comparative rate will include all associated fees to provide a more accurate repayment amount. You might even find the lowest rate isn’t always the cheapest option.