second mortgage private lending australia access equity behind existing lender

Second Mortgage Lenders Australia

Business-purpose second mortgage loans from $50,000, secured behind an existing first mortgage. A second mortgage is an additional loan secured against a property that already has a first mortgage. It may allow an eligible business owner to access property equity without refinancing the existing first loan.

Innovate Funding arranges business-purpose second mortgages through private and non-bank lending partners and directly funds selected transactions. We explain which arrangement applies before you commit. We assess the property, existing secured debt, business use of funds and proposed exit strategy. Indicative terms can generally be provided within 24–48 hours of receiving sufficient information. Request indicative second mortgage terms or call 02 8919 3639.

Second mortgage lending at a glance

Loan amounts: From $50,000, with the maximum assessed individually.
Residential property: Up to 70% combined LVR in NSW, Queensland and the ACT. Lower ceilings apply in other locations.
Commercial property: Up to 60% combined LVR in NSW, Queensland and the ACT. Lower ceilings apply in other locations.
Loan terms: Typically 3–12 months; longer terms considered individually.
Indicative terms: Generally within 24–48 hours after sufficient information is received.
Loan purpose: Eligible business-purpose borrowing only.

Combined LVR includes the existing secured exposure and proposed second facility, including any interest and fees funded within the loans. Lower lending limits may apply. Indicative terms are not formal approval or a guaranteed settlement timeframe.

Keep your first mortgage or refinance?

A business-purpose second mortgage may let you keep your existing bank loan and borrow against available equity. Check your first lender’s consent requirements and whether the proposed second lender requires a deed of priority.

Keep the first mortgage when its terms still suit your business, a second facility provides the net funds you need and you have a supported repayment plan. Applicable combined LVR depends on the property location, security type and lender assessment.

Compare refinancing the first mortgage if it is nearing expiry, first-lender requirements make a second facility impractical, or one replacement facility could better suit your repayment plan. Compare the cash each option releases, total costs over the planned term and settlement timing.

Estimate your net funds and combined LVR using the LVR guide. If you are replacing the existing facility, see our first mortgage options.

Private second mortgage loans or a second home loan?

A private second mortgage loan is provided by a private or non-bank lender and secured behind an existing first mortgage. The word second describes the mortgage position; it does not mean a loan to purchase a second home.

Innovate Funding's second mortgage service is for eligible business purposes, including verified working capital or business debt refinance. Personal and household second mortgage borrowing is not available through this service.

For security in Melbourne, see our Melbourne private lending guide. Check the LVR limits for the security address alongside existing debt, funded costs and the proposed exit. A property address or available equity alone does not establish approval.

Is a business-purpose second mortgage suitable for me?

A second mortgage may suit a business owner who has available property equity, needs funding for a defined period and can demonstrate how the facility will be repaid.

We consider four main factors:

Property security: The type, location and accepted value of the residential or commercial property.
Existing debt: The first mortgage balance, facility limit and any other secured liabilities.
Business purpose: What the funds will pay for and the evidence supporting that use.
Exit strategy: How the loan will be repaid, when the funds are expected and what supports the timing.

Borrower structure and documentation are assessed for the individual transaction. Provide your business name and ABN, together with relevant company or trust details.

What can the funds be used for?

Common eligible purposes include:

Working capital: Paying suppliers, wages, materials and operating expenses.
Stock purchases: Buying inventory before customer payments are received.
Business tax debt: Paying an eligible ATO or other business tax liability.
Business debt refinance: Replacing an expensive or maturing business facility.
Business expansion: Funding equipment, additional capacity or other verified commercial expenditure.

The actual use of funds must qualify as business-purpose borrowing. Holding an ABN or offering a home as security does not, by itself, establish eligibility. Personal and household borrowing is not available through this service.

For related options, explore secured business loans and short-term business finance.

How much can I borrow with a second mortgage?

Borrowing capacity depends on the property’s accepted value and the total debt secured against it. Combined loan-to-value ratio, or combined LVR, includes the first mortgage and the proposed second mortgage.

Combined LVR = total assessed secured debt ÷ accepted property value × 100.

For an illustrative residential scenario:

Accepted property value: $1,500,000
Existing first mortgage: $650,000
Maximum combined LVR used in this example: 70% for eligible NSW residential security
Maximum combined debt: $1,050,000
Potential capacity for a second facility: $400,000

The $400,000 is the potential gross second mortgage in this example. If the lender retains $18,000 for interest and deducts $10,000 in fees at settlement, the borrower would receive $372,000. Combined LVR remains 70% because those deductions are already included in the gross facility. These illustrative figures are not an offer of finance.

Why do you need the first mortgage balance and facility limit?

A current balance may not show the full amount the first lender can advance or secure. Undrawn facilities, redraw and priority arrangements can affect the second lender’s assessment. Send both the current balance and approved limit, together with details of other secured debt. The amount available is assessed against the complete lending position.

Real transaction: $250,000 second mortgage in Penrith

Registered second mortgage behind Commonwealth Bank.

Loan amount: $250,000
Combined LVR: 60%
Loan term: Six months
Interest: 1.5% per month, capitalised
Settlement: Nine business days
Proposed exit: Contracted business receipts

A Penrith business owner needed working capital to pay suppliers and obtain goods while awaiting payments from contracted work. Innovate Funding arranged a second mortgage while the existing CBA loan remained in place.

Following legal review, the second lender waived its separate deed-of-priority requirement. That decision does not establish that first-lender consent is unnecessary for other transactions. Read the full Penrith second mortgage case study. This is an individual completed transaction. Its pricing, documentation and settlement time are not guaranteed for another borrower.

Concord refinance example. A Concord business owner used a $200,000 second mortgage to expand while keeping the first mortgage in place. The combined loan-to-value ratio was 65%. The borrower refinanced after six months to repay the second mortgage. Read the Concord second mortgage case study.

How to compare second mortgage lenders in Australia?

Compare the complete facility against your funding need and repayment plan. The main considerations are:

Net funds available: How much reaches you after funded interest, fees and other deductions?
Combined LVR: What property value and existing debt exposure will the lender use?
Total cost: What interest, lender fees, brokerage, legal costs and discharge charges apply?
Repayment structure: Is interest serviced monthly, retained upfront or capitalised?
First mortgage requirements: Is consent, a deed of priority or other documentation required?
Term and exit: Can the proposed sale, refinance or business receipts repay the facility within the agreed period?

Where appropriate, we also consider whether refinancing the first mortgage could provide a more suitable overall structure. Explore our first mortgage lending service if the existing loan needs to be replaced.

What are second mortgage interest rates and fees?

There is no single second mortgage interest rate. Pricing is assessed for the individual transaction, including the lender’s security position, combined LVR, property, loan term and repayment risk.

The Penrith transaction featured on this page was priced at 1.5% per month. That is a completed transaction example, not an advertised minimum or a quote for another borrower.

Costs may include:

Interest, which may be quoted as a monthly rate.
Establishment or application fees.
Brokerage or origination fees, where applicable.
Valuation and lender legal costs.
Your own legal advice and any first-lender consent or priority-document costs.
Account fees, minimum-interest provisions and discharge or early-repayment charges.

Some facilities allow interest to be capitalised instead of paid monthly. This reduces monthly cash outflow on that facility, but increases the amount owing and must be allowed for when assessing the exit and available equity.

Compare the total borrowing cost for your expected repayment date, including any minimum-interest period. Ask for the gross facility, net proceeds and estimated payout to be shown separately. Read our second mortgage interest rates guide and capitalised interest explanation.

Do I need first-lender consent or a deed of priority?

The requirements depend on the applicable state rules, existing mortgage documents and the proposed lender’s conditions.

First-lender consent concerns permission for additional security under the existing loan arrangements. A deed of priority sets out agreed arrangements between lenders, which may include priority amounts, further advances and enforcement rights.

Registration requirements, contractual consent and the second lender’s funding conditions are separate matters. A second lender waiving its deed requirement does not resolve any separate first-lender consent requirement.

We review the existing lending arrangements early so any required approvals and legal work can be factored into the transaction. Read our guide to deeds of priority for second mortgages.

What information do I need to apply?

Start with these details:

Property: Address, property type and estimated value.
Existing debt: First lender, current balance, facility limit and any other secured loans.
Funding: Amount required, business use of funds and deadline.
Borrower: Business name, ABN and relevant company or trust details.
Exit: How the loan will be repaid and the evidence supporting that timing.

Depending on the transaction, we may then request identification, rates notices, mortgage statements, evidence of the business purpose, contracts or invoices, and valuation or legal documents. Submit your second mortgage scenario.

How the second mortgage process works?

Scenario review: We assess the purpose, security, debt position, funding requirement and proposed exit.
Indicative terms: For suitable scenarios, indicative terms can generally be provided within 24–48 hours of receiving sufficient information.
Valuation and due diligence: The lender reviews the property, borrower, liabilities and repayment evidence. A desktop or full valuation may be required.
Consent and documentation: The relevant parties complete any required first-mortgage approvals, priority arrangements and loan documents.
Approval and settlement: Funding proceeds once formal approval is in place and settlement conditions are satisfied.

Settlement timing depends on the transaction, valuation, lender assessment and legal requirements.

Frequently asked questions

Can I get a second mortgage without refinancing my existing home loan?

Potentially, yes. The existing first mortgage can remain in place while a separate second mortgage is arranged. This depends on available equity, the first mortgage arrangements and lender approval. Innovate Funding’s service is for eligible business-purpose borrowing.

How much equity do I need for a second mortgage?

Eligible residential property may be considered up to 70% combined LVR in NSW, Queensland and the ACT, 65% in WA, Victoria and South Australia, 55% in the NT including Darwin, and 50% in Tasmania. Check the LVR limits by state and territory for the security address.

Eligible commercial property may be considered up to 60% combined LVR in NSW, Queensland and the ACT, 55% in WA, Victoria and South Australia, 45% in the NT including Darwin, and 50% in Tasmania. Assessment includes the existing secured debt and proposed gross facility.

Combined LVR includes the existing secured exposure and proposed second facility, allowing for interest and fees funded within the loans. Lower limits may apply. Net funds available depend on the gross facility, existing-debt payouts and settlement deductions.

How long does a second mortgage take to settle?

Indicative terms can generally be provided within 24–48 hours of receiving sufficient information. Settlement takes additional time for lender assessment, valuation where required, loan documents and any first-mortgage requirements. A completed Penrith transaction settled in nine business days; timing for another application may differ.

Can I get a second mortgage if my bank has declined additional lending?

Possibly. A private lender may assess the property’s equity, business purpose and exit differently from a bank. The reason for the bank’s decline, existing liabilities and credit history still need to be considered. Approval is not guaranteed.

Do I need full financial statements?

Documentation requirements depend on the lender and transaction. Some scenarios may be considered with reduced financial documentation, but evidence of the business purpose, security, liabilities and repayment plan is still required.

Will I still need to pay my first mortgage?

Yes. Your existing first mortgage obligations continue unless that lender agrees otherwise. Capitalising interest on the second mortgage does not remove repayments due on the first.

Can I repay a second mortgage early?

Early repayment depends on the loan agreement. Minimum-interest periods, notice requirements and discharge or other charges may affect the payout. Ask for the early-repayment terms before accepting the facility.

Request indicative second mortgage terms

Tell us the property address, estimated value, existing mortgage balance and lender, amount required, business purpose and proposed exit. Innovate Funding can review the scenario and explain the available structure, likely documentation and next steps. Learn more about Innovate Funding. Request indicative second mortgage terms or call 02 8919 3639.

All loans are subject to eligibility, credit assessment, acceptable security, valuation where required, satisfactory documentation and approval. This information is general and is not an offer of credit or financial, legal or tax advice.