Loan against property in Australia

If you’ve done business in India or several other markets, “loan against property” is a familiar product: you pledge a home or commercial building and borrow against it. Search the same phrase in Australia and you’ll find the idea everywhere but the label almost nowhere. Australian lenders sell the same thing under different names, structure it differently, and register it differently.

This page translates LAP into Australian terms, so you can compare like with like and ask for exactly what you need.

What is a loan against property in Australia?

In plain terms, it’s a business loan secured on property you already own. The property isn’t sold. The lender records its interest on the title, lends you a portion of the equity, and is repaid at the end of the term.

Australians call this a secured business loan, a property-secured loan or a private mortgage, and it comes in three forms:

• A first mortgage, where the lender ranks first on the title. Used when the property is debt-free, or when an existing loan is paid out at settlement.
• A second mortgage, which ranks behind a loan already on the property. Used when you want to keep the existing loan.
• A caveat loan, where the lender protects its interest with a caveat on the title instead of a registered mortgage. Used for speed and shorter needs.

For an overview of all three side by side, see secured business loans.

How do LAP terms translate into Australian lending language?

Much of the confusion comes from vocabulary. This table maps the words you may know to the ones you’ll hear from an Australian lender, solicitor or accountant.

Term you may know	Australian equivalent	What’s different here
Loan against property (LAP)	Secured business loan or private mortgage	Delivered as a first mortgage, second mortgage or caveat loan
Top-up loan	Loan increase, or a second mortgage	If the bank won’t increase, a second mortgage can sit behind it
Balance transfer	Refinance	A private first mortgage can pay out the old lender at settlement
Sanction letter	Letter of Offer	Sets out amount, term, interest method, fees and conditions
Processing fee	Assessment fee	Small, varies per loan, shown on the Letter of Offer
EMI	Monthly repayment	Interest can be prepaid or capitalised instead
Original title deeds held by lender	Mortgage or caveat recorded on the electronic register	No paper deeds change hands
Technical and legal verification	Title searches and the lender’s own property assessment	No formal valuation required
Disbursement	Settlement	Often completed electronically through PEXA
Foreclosure (paying off early)	Early repayment or discharge	“Foreclosure” here means a lender enforcing after default
Co-applicant	Co-borrower, co-owner or guarantor	Every registered owner signs the security

That “foreclosure” row is worth reading twice. Telling an Australian lender you plan to “foreclose in six months” will cause a moment of alarm; what you mean is that you plan to repay early.

How is an Australian property-secured loan different from a typical LAP?

The biggest differences are in the term, the way it’s repaid, and the paperwork behind the title.

	A typical overseas LAP	Australian private secured business loan
Term	Often many years	1 to 24 months on a first mortgage; shorter for second mortgages and caveats
Repayment	Monthly instalments over the term	Interest monthly, prepaid or capitalised; principal repaid by the exit
Assessment	Heavy focus on income documents	Mainly the property, the equity and the exit
Title	Original documents often deposited	Electronic register; lender’s interest recorded on it
Purpose here	Business or personal	Business purposes only
Who decides	Bank or finance company	A direct private lender

The title is electronic. NSW cancelled all paper certificates of title on 11 October 2021. Queensland no longer issues paper certificates. In Victoria, every new certificate of title has been electronic since 3 August 2024, and existing paper titles remain valid only until they’re next needed for a transaction. So you won’t be asked to hand over an original deed. The lender’s mortgage or caveat is recorded on the register, and your solicitor handles the rest.

The term is short on purpose. A private secured loan is designed to bridge to something: a refinance, a sale, a large payment into the business. If you need a fifteen-year loan, that’s bank territory. If you need $300k this month while the bank catches up, it’s exactly what a private lender is for. Our short-term first mortgage page explains how a term from 1 to 24 months is chosen.

Which Australian structure matches your LAP need?

What you’re trying to do	Structure that usually fits
Borrow against a property you own outright	Private first mortgage
Keep your current home or business loan and borrow extra	Second mortgage
Move away from a lender that won’t help	Private first mortgage that refinances it
Raise a smaller amount within days	Caveat loan
Use more than one property together	Multiple properties as security

If you’re unsure, the 60-second structure quiz narrows it down.

Who is a loan against property suited to?

It tends to suit:

• business owners with equity in Australian residential, commercial or industrial property;
• importers, wholesalers, transport operators, medical practices, franchisees and builders who need funds faster than a bank can move;
• owners whose income documents don’t yet tell the full story, but whose exit is clear;
• families who own property together and want to back a family business, with everyone’s informed agreement.

It doesn’t suit:

• property held only overseas, because the security has to be on an Australian title;
• long-term borrowing with no planned exit;
• personal or household spending, which this lender doesn’t fund;
• anyone who isn’t comfortable that the property is at risk if the loan isn’t repaid.

What if the property is held by a company, trust or several family members?

Shared and structured ownership is common, and none of it stops a loan. It just changes who signs.

• Company-owned property: the company gives the security through its directors, and directors usually give personal guarantees.
• Trust-owned property: the trustee signs, and the trust deed has to allow the trustee to borrow, give security and guarantee. Have the deed and any variations ready early.
• Several owners: every person on the title signs. If some of them are helping rather than borrowing, they are giving third-party security and should take their own legal advice first.
• Owners living overseas: they still sign, so allow extra time for documents to be signed and identity checks completed from abroad.

Our pages on company or trust owned property and third-party security cover each case in more detail.

How does it work, step by step?

1. Enquire in about 60 seconds. Amount, purpose, the property, its rough worth and what’s owing. No credit check.
2. Specialist call. A secured-lending specialist confirms the figures and recommends the structure.
3. Property assessment. Done by the lender directly. No formal valuation required.
4. Letter of Offer. The Australian version of a sanction letter: amount, term, interest method, every fee and the conditions. Our guide to the Letter of Offer explains each clause.
5. Documents and signing. Every registered owner, borrower and guarantor signs, after their own legal advice where they’re giving security for someone else’s loan.
6. Settlement. The mortgage or caveat is lodged, and funds are paid. Through PEXA, documents are signed and lodged with the land registry and funds exchanged electronically.

What documents will you need?

• Photo ID for every borrower, owner and guarantor.
• Statements for any loan already secured on the property.
• Business details: ABN, and the company extract or trust deed where an entity is involved.
• The purpose, in a sentence or two.
• Evidence of the exit, such as a refinance plan, a sale contract or contracts showing money coming in.

The full list is in our guide to documents for a private mortgage.

How fast is it, and what does it cost?

Funding is possible within 24 to 48 hours for up to $5m once documents are in, and $20k to $250k is possible the same day. When an existing lender has to provide a payout figure or consent, ask on day one. If you’re working to a deadline, send your details now so the clock starts on the parts that take longest.

Unlike many LAP products overseas, there’s no advertised headline price to compare. The price of each loan is worked out from four things: the security, the LVR, the term and the exit, with the aim of the sharpest price that combination allows. Ranking matters too: a lender sitting second or relying on a caveat is behind someone else, so those structures cost more than a first mortgage. The small assessment fee, which plays the role a processing fee does elsewhere, is set out on the Letter of Offer. Interest can be prepaid or capitalised; see prepaid or capitalised interest for how each changes the amount you repay.

What are the risks?

The property is the security. If the exit fails and the loan isn’t repaid, the lender can enforce against it. Three habits keep that risk small: borrow only what the business purpose needs, choose a term with a buffer beyond your expected exit date, and talk to the lender early if anything slips. Our exit strategy guide shows what a strong exit looks like.

What does a loan against property look like here?

Illustrative example: a Harris Park grocery importer owns a debt-free warehouse unit in Smithfield, assessed by the lender at $1.4m, and needs $400k to clear a container shipment and pay customs charges. Illustrative: $400k is about 29% LVR on a private first mortgage. Interest is capitalised for six months, and the loan is repaid when the stock is sold through to wholesale customers and the bank completes a longer-term facility.

Illustrative example: a Truganina transport operator and his parents own the family home together, with $450k owing to a bank on a property assessed at $1.2m. He needs $150k for a deposit on a depot site. Illustrative: total debt of $600k is 50% LVR. With the bank’s consent, a second mortgage provides the funds, all three owners sign after independent legal advice, and the loan is repaid when the depot purchase is refinanced to a bank.

Own property in Australia? See if you qualify

You can find out what’s possible without any mark on your credit file. Tell us about the property, what’s owed against it, and what the business needs. Your enquiry goes to fundU, the direct lender behind this site, where a secured-lending specialist reads it personally and calls you back. It isn’t forwarded to a crowd of funders.

Accurate answers about the property and the loans on it get you a dependable answer the first time. Prefer to compare first? Read about equity release for business or check your borrowing power.

Start your loan against property enquiry, and see what your property could unlock.