Second mortgage business loans
A second mortgage business loan lets you borrow against property equity without touching your existing home or commercial loan. HomeSec registers behind your current lender, from $20,000 to $5,000,000, to a combined LVR of 80% on residential security or 70% on commercial, typically settling in 24 to 72 hours. Your first mortgage rate, term and structure stay exactly as they are.
0:56 See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.
See if you qualifyWhy not just refinance?
Because refinancing to release $300,000 can cost you the rate on $900,000. If your first mortgage was written when money was cheaper, or it is a fixed loan with break costs, or your current financials will not support a new full-doc application, refinancing is the expensive way to solve a contained problem. A second mortgage leaves the good loan alone and prices only the money you actually need.
It is also faster. A bank refinance is a three-to-eight week process with a full credit assessment. A second mortgage behind it is a title search, a consent where required, and a set of documents.
What is the first mortgagee's role?
For a registered second mortgage, your existing lender is generally asked to consent, and a priority deed sets out how the two loans rank against each other on a sale. Most Australian banks and non-banks handle these routinely. Turnaround varies by lender, and it is the single most common reason a second mortgage takes 72 hours rather than 24.
Where the deadline will not wait for consent, a caveat is often the better instrument — it needs nobody's agreement. We will tell you which one your file suits on the first call, and we do not charge differently for the advice.
How the two mortgages rank
Priority runs in the order the mortgages are registered. Your bank registered first, so it is paid first out of a sale; we register second and are paid out of what is left. That is the whole of it, and it is why a second mortgage does not disturb the loan you already have.
What the consent conversation is really about is not whether we may lend — it is how much the first mortgage is treated as securing. A bank's mortgage is usually drawn as an "all moneys" security, so it can cover later advances as well as the original loan. The priority deed fixes a figure, so that both lenders know what sits in front of what.
How much can I release?
Combined LVR to 80% on residential security, 70% on commercial. In practice: take the property's value, multiply by the applicable ceiling, subtract what is owed on the first mortgage, and the balance is roughly what is available.
| Security | Value | 1st mortgage | Ceiling | Available |
|---|---|---|---|---|
| Residential | $780,000 | $410,000 | 80% — $624,000 | $214,000 |
| Residential | $1,250,000 | $690,000 | 80% — $1,000,000 | $310,000 |
| Residential | $2,400,000 | $1,100,000 | 80% — $1,920,000 | $820,000 |
| Residential | $4,000,000 | $1,450,000 | 80% — $3,200,000 | $1,750,000 |
| Commercial | $3,000,000 | $900,000 | 70% — $2,100,000 | $1,200,000 |
Indicative only. Value is assessed on our own view of the security, not a formal valuation.
What second mortgages are used for
- Working capital without touching the home loan
- The most common file: a good bank loan on the house, a business that needs $150,000 for a season, and no appetite for refinancing a $700,000 facility to get it.
- The ATO, paid direct from settlement
- A tax debt cleared in one payment behind the bank, with no repayments while the business recovers the ground.
- A deposit on premises or a site
- Equity in the home becomes the deposit; the purchase itself is financed separately, or by us in first position over the new property.
- Consolidating expensive facilities
- Daily-debit loans and called facilities paid out behind the bank, at a lower cost and with the cash effect during the term reduced to nothing.
- Bridging to a sale of another property
- The investment unit is under contract; the money is needed before it settles. A second mortgage over the home bridges, repaid from the proceeds.
Why we ask what the money is for
Every lender in this market asks what the funds are for and writes the answer down. It can read like box-ticking and it is not. The answer decides which kind of loan this is, and getting it right is the lender's job rather than yours — which is why a careful one asks properly and puts the answer in the file.
HomeSec provides credit wholly and exclusively for business and investment purposes. Business lending and consumer lending are two different things with two different rulebooks, and the line between them is drawn by what the money is for — not by the property it is secured against. That is the part most people have backwards. A loan secured over your own home is business lending where the money is going into the business, and the home can be the security on exactly that basis. The address does not decide it; the purpose does.
So the practical answer is a short one. If the money is for the business — stock, wages, a tax bill, a deposit on premises, bridging a settlement, paying out something expensive — this is the product, and the equity in the property is what makes it possible. If what you want is a second mortgage over your own home for personal reasons, a bank or a mortgage broker is the right call and you will be told so on the first call, before anything has been paid for.
Second mortgage, caveat or first — which one is your file?
| Second mortgage | Caveat | First mortgage | |
|---|---|---|---|
| Your existing home loan | Untouched — rate, term and structure stay | Untouched | Paid out and replaced |
| Consent required | Usually the first mortgagee's | Nobody's | Nobody's |
| Typical settlement | 24 – 72 hours | As little as 24 hours | As little as 24 hours |
| Cost tier over the same property | Middle | Highest | Lowest |
| Use it when | The bank loan is good and you need the difference | The date will not wait for consent | The property is unencumbered, or the existing loan is small or expensive |
HomeSec's own three instruments compared over the same property. "Cost tier" ranks them against each other; it is not a rate, and none is published.
From the call to the money
Tell us the deal
Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.
Minutes
Conditional approval
Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.
About 15 minutes
Funds released
As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.
As little as 24 hours
On a second mortgage the third step runs 24 – 72 hours, and the difference is the first mortgagee's consent. The first lender's verbal consent takes a day or two. Why that makes it the fast instrument over a property that already has a loan, in Paul Stone's words and on video, is on the fast second mortgage page.
The term is open
We do not fix it. There is no minimum, no maximum, no penalty for repaying early and no fee for extending — because we fund our own loans with our own money and have no fund mandate requiring capital back on a date. If your exit moves, we move with it, and it takes a phone call. Why an open term matters more than the rate.
How a second mortgage ends
This page uses the word exit four times, and a reader deciding whether to call us is entitled to know what one actually looks like. On a second mortgage there are three, and the video above puts the first of them plainly: you can "refinance both your 1st and 2nd mortgage into one new 1st mortgage later down the track."
- Consolidation. Both loans are refinanced into a single new first mortgage once the business can carry a full application again — once the year the bank is reading looks like the year the business actually had. The second mortgage is what holds the position until then, not a permanent structure.
- Business cash flow. The loan is paid out of trading, which is the ordinary exit where the money was borrowed against a receipt that lands later: a settlement, a season, a contract already signed.
- The sale of an asset. The security property, or another one, or equipment, or a business line being wound back. It does not have to be the property we are registered over.
None of the three is ranked above the others, and we do not require the one you name to be the one that happens. What is assessed on the first call is whether the exit you describe can realistically occur while the loan is running. Because the term is open, an exit that moves is something to tell us about rather than something you are penalised for — it is a phone call, and there is no fee attached to it.
What it costs, and the honest limitation
Second mortgage money in the Australian private market generally sits well above bank pricing — this is higher-risk lending and it is priced that way. We do not publish a headline rate, because private lending is risk-priced per file and any single number would be a best case or a bait. Here is how it is actually priced, and every fee that exists.
The limitation worth stating plainly: this product solves a timing problem, not a solvency problem. If the business is losing money structurally, borrowing at second-mortgage rates against the family home makes the eventual outcome worse, not better. We decline files on that basis regularly, and we would rather tell you in the first ten minutes.
Questions we get on the phone
Will my bank find out?
Does my first mortgage rate change?
How long can I keep it?
Do second mortgage lenders require a valuation?
Second mortgage or caveat — which is better?
Can the second mortgage be in my company's name?
Can I make repayments during the term if I want to?
What happens at the end?
Is it hard to qualify for a second mortgage?
Is a second mortgage a good idea?
What if my credit file is not clean?
Can a bank refuse a second mortgage?
How much equity do you need for a 2nd mortgage?
Can I get a second mortgage for personal reasons?
How much can you borrow on a second mortgage?
Not a call centre. Tell us the amount, the purpose and what property is available, and we will tell you which instrument fits and what it costs. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
These describe the same money from different angles. If the one you are on is not the shape you need, one of these will be.
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Reviewed by Jason Brockmuller, Joint Chief Executive