First mortgagee consent: getting your bank's yes to a second mortgage

Most second mortgage delays have nothing to do with the second lender. They come from the first one. Your bank holds first place on the title, its contract may say you can’t add further security without its permission, and banks rarely treat that request as urgent.

This guide explains what consent actually is, why the land titles office usually isn’t the one asking for it, how titles are now held in each state, and how to ask so the request doesn’t become the slowest step in your deal.

What is first mortgagee consent?

The first mortgagee is the lender holding the first-ranking registered mortgage over your property, usually a bank. First mortgagee consent is that lender’s written permission for you to give another lender security over the same property.

It’s best understood as a promise you’ve already made. When you signed the bank’s mortgage, you very likely agreed not to grant further mortgages or encumbrances without its approval. Consent is the bank releasing you from that promise for one specific loan.

The Queensland Government’s own home lending terms are a clear public example. Its borrowers must get its permission, as the existing lender, before a second mortgage goes on the title. Commercial and business lenders commonly include similar terms.

Is consent a land registry rule or a contract rule?

In most cases it’s contractual. The land titles office registers mortgages in the order they’re lodged, and priority follows lodgement time, as Titles Queensland’s practice manual sets out. The registry’s job is to record the queue, not to police your bank’s contract.

There used to be a stronger registry angle in New South Wales. Under the old control of the right to deal (CoRD) framework, the first mortgagee’s consent was effectively needed for many dealings. That framework was abolished on 11 October 2021, and the Registrar General’s guidelines now state that CoRD holder consent is not required for a dealing to be registered.

That doesn’t mean you can ignore your bank in NSW. It means the requirement now lives where it always really lived: in the loan contract.

How are titles held in each state, and does it matter?

The shift from paper to electronic titles has changed the mechanics around consent.

State	How the title is held now	What it means for a second mortgage
New South Wales	Paper certificates and CoRD abolished from 11 October 2021	No CoRD consent at the registry; your loan contract still governs consent
Victoria	All new certificates electronic from 3 August 2024; a mortgagee usually manages the eCT until discharge	The first lender is typically involved in the electronic process, so ask your solicitor early how it will participate
Western Australia	Duplicate certificates of title removed from 7 August 2023	No paper title to produce; consent is a contract question
Queensland	Registered interests rank by lodgement; mortgage priority can be changed with a Form 30	Consent comes from the loan contract; the bank stays first unless a priority form is registered
Other states and territories	Electronic lodgement increasingly standard	Check the contract, and ask your solicitor about local registry steps

What does a bank want to know before it consents?

A bank deciding on consent is protecting its own first-ranking position. It typically wants to know:

• Who the second lender is and that it’s a genuine lender.
• How much is being borrowed, and on what security.
• That its priority is untouched: the second mortgage ranks behind it.
• That its loan will stay current throughout the second loan.
• The purpose, especially if the bank also lends to the business.

Some banks ask for a copy or summary of the second lender’s Letter of Offer. Others have a standard consent form. Find out which applies before you send anything.

How do I ask my bank for consent?

A clean request gets a faster answer. In order:

1. Find the clause. Ask your solicitor to locate the further security or encumbrance term in your mortgage and loan contract.
2. Find the right team. Business banking relationship managers can often route consent requests faster than a general enquiry line.
3. Put it in writing. State the property, the second lender, the amount, the purpose and the expected term.
4. Attach what helps. A summary of the second loan’s terms, and confirmation that your bank’s repayments will continue as normal.
5. Diarise a follow-up. Banks queue these requests. A polite chase a few days later often moves it.

Start the consent request the same day you start the second mortgage enquiry. The two can run side by side, and consent is often the last item outstanding before settlement. Our second mortgage checklist shows where it fits among the other preparation steps.

What can I get done while I wait for consent?

Almost everything. Consent is one item on the path to settlement, not the gate at the front of it. While the bank considers your request, you can:

• Complete the assessment. The property is assessed directly, with no formal valuation required, so this step doesn’t hang on a third party’s report.
• Sign the Letter of Offer. Where your bank’s contract requires consent, expect the second mortgage to proceed on the basis that consent is obtained before settlement.
• Verify identity. Every owner, director and guarantor can complete identity checks now.
• Gather exit evidence. A sale contract, an agent’s campaign plan or a bank’s refinance indication strengthens the file whatever the bank decides.
• Instruct your solicitor. Loan documents can be prepared and reviewed so settlement can be booked the moment consent lands.

Running these steps side by side is the difference between a second mortgage that settles days after consent arrives and one that only starts moving then.

Is consent needed if the first mortgage is about to be repaid?

Sometimes the timing solves the problem. If the bank’s loan is being paid out in full at the same settlement, for example because a private first mortgage is refinancing it, the bank’s mortgage is discharged and there’s no further security to consent to. That’s one reason a full refinance can be quicker when a bank is slow or unwilling.

Does consent change who gets paid first?

No. Consent and priority are separate things. Once consent is given and the second mortgage is registered, your bank remains first and the private lender ranks second. On a sale, the bank is repaid in full before the second lender receives anything. Our page on how second mortgages rank explains the payout order.

Changing the order takes a separate document signed by the lenders affected. In Queensland that’s a Form 30 Mortgage Priority; Victoria has a variation of priority of mortgages form; elsewhere you’ll hear “deed of priority”. These are mostly used in larger or more complex deals.

What if the bank says no?

A refusal doesn’t end the conversation. It changes the structure. The usual paths:

• Use a different property. A debt-free property, or one with a more flexible lender, can carry the loan instead.
• Refinance the whole debt. A private first mortgage pays the bank out at settlement, removing the need for its consent. Compare the costs in second mortgage vs refinance, and see how the move works in refinancing a bank first mortgage.
• Add third-party security. A family member or fellow director may offer their property, as explained in third-party security.

Can a caveat loan get around a refusal?

It’s tempting, but it’s rarely the answer. A caveat isn’t a registered mortgage, so it travels through the land titles office differently. Your bank’s contract, though, may restrict caveats and other encumbrances as well as mortgages. Landgate’s own guidance notes that mortgage terms may prevent a caveat being lodged without the mortgagee’s consent.

There’s also the longer view. If the caveat loan needs to run longer and convert to a registered second mortgage, the consent question returns. It’s cleaner to solve it at the start.

Illustrative example: a Townsville freight operator wants $300k against a commercial yard that carries a bank loan of $900k. Illustrative: the director asks the bank for consent on day one, while the private lender assesses the yard. The bank asks for a summary of the second loan and confirmation that its own repayments continue. Consent arrives the following week, the second mortgage settles two days later, and the bank loan carries on unchanged.

Key terms

• First mortgagee: the lender with the first-ranking registered mortgage.
• Further security clause: the contract term restricting extra mortgages or encumbrances.
• eCT: electronic certificate of title, managed in Victoria by the mortgagee until discharge.
• Priority document: an agreement between lenders, such as Queensland’s Form 30, that changes their ranking.

Bank consent in hand, or on its way? See if you qualify

You don’t need consent before you enquire. In fact, it’s better to run both at once. A specialist reviews every enquiry personally and can tell you early whether a second mortgage, a full refinance or a different property is the stronger path.

Enquiring involves no credit check, and your details stay with us instead of being circulated to other lenders. Our lending partner fundU lends directly, with no formal valuation required. Be precise about the property, who holds the first mortgage and what’s owing, because that’s what gets you the right answer the first time.

Start your second mortgage enquiry in about 60 seconds, or talk through the consent question with a specialist if you’re not sure your bank will agree.