First mortgage business loans

A first mortgage business loan puts HomeSec in first position on the title — either over a property you own outright, or by paying out your existing lender on settlement. From $20,000 to $5,000,000, to 80% LVR on residential security and 70% on commercial, settling in as little as 24 hours on a clean file. No financials, no valuation, and nobody else's consent to wait for.

When first position is the right answer

If the property carrying the loan is owned outright, this is the structure you should be offered. There is no existing lender to ask, no priority deed to negotiate and no consent to wait on — which is why it is the version of our lending that most reliably settles inside 24 hours.

It is also the right answer when an existing loan is small enough, or expensive enough, that paying it out costs you nothing. If there is $80,000 left on a commercial property worth $1.2 million, refinancing that $80,000 into our advance is simpler and cheaper than registering behind it.

First, second or caveat — which one is your file?

The three instruments secure the same money in three different ways. Most callers do not know which they need, and they should not have to: we tell you on the first call. But here is the difference, plainly, so you can see it coming.

A comparison of HomeSec's own three instruments, not of lenders. "Cost tier" describes how the three rank against each other on the same file; it is not a rate and none is published.

When it is the wrong answer, and we will say so

If your existing first mortgage is a good loan — a low fixed rate, a long remaining term, a structure that suits you — paying it out to release equity is the expensive way to solve a contained problem. You would be repricing the whole balance to borrow a fraction of it.

That is what a second mortgage is for: we sit behind the bank, your rate and term stay exactly as they are, and only the new money is priced as private lending. Where a deadline will not wait for the first mortgagee's consent, a caveat needs nobody's agreement at all. We will tell you which of the three your file suits on the first call, and we do not charge differently for saying the smaller loan is the better one.

How much you can borrow

Take the property's value, multiply by the applicable ceiling — 80% on residential security, 70% on commercial — and, if there is an existing loan being paid out, subtract it. What is left is roughly what is available, subject to the minimum of $20,000 and the maximum of $5,000,000. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.

What we lend against

Residential, commercial, rural or vacant land, anywhere in Australia — almost anywhere in australia — metro, regional and rural. Towns of 3,000 or more people as a guide; smaller populations on merit. First or second-ranking mortgage. Cross-collateralisation across multiple properties. Your home can be the security. Several properties can secure one loan, and the borrower does not have to be the owner: a director's home routinely secures a company's loan, with everyone on title signing.

What people use it for

Releasing equity from a property you own outright

The cleanest file we see. No payout, no discharge, no waiting. Title search, documents, settlement.

Refinancing out of a lender that has become a problem

A facility that has been called, defaulted or re-priced, where the bank has stopped being a partner. We pay it out and the pressure stops the same day.

Clearing the ATO and creditors in one settlement

One loan pays out the tax debt, the overdue suppliers and the small existing mortgage, and the business starts the month with one lender and one date.

Buying a commercial property, or a residential one in a company name

First position over the property being purchased, with the purchase rule below applied on the first call.

Bridging to a sale

The property is going to market or is already under contract. First position over it, no repayments while it sells, repaid from the proceeds.

Paying out your existing lender: what actually happens

Nothing that needs you. Once the loan is conditionally approved, our solicitor requests a discharge figure from your existing lender — the amount that clears the loan on the settlement date. On the day, that figure is paid to them directly from our advance, their mortgage is discharged from the title and ours is registered in its place. The balance goes wherever you have directed it: your account, the ATO, a creditor, a vendor. At no point are you carrying two loans, and at no point does the old lender get a say in the new one.

Where the existing loan is a fixed-rate facility, the discharge figure can include a break cost set by that lender. We will tell you what it is before you commit, and if it makes the second-mortgage route cheaper we will say that too.

From the call to the money

A first mortgage over an unencumbered property is the fastest of these. A payout adds only the time your existing lender takes to issue a discharge figure, which for most Australian banks and non-banks is a day or two.

What it costs

First position is priced better than second, and better than a caveat, because it carries less risk. We still do not publish a number: private lending is priced per file on the property, the amount, the purpose and the exit, and a headline rate with the word "from" in front of it tells you nothing about the rate you would actually get. Here is how it is priced, and every fee that exists.

The limitation worth stating: this solves a timing problem, not a solvency problem. If the business is structurally losing money, a first mortgage over the family home makes the eventual outcome worse rather than better. We decline files on that basis regularly and would rather tell you in the first ten minutes.

Reviewed by Jason Brockmuller, Joint Chief Executive