A second mortgage is a registered loan that sits behind your senior lender on the same property and releases additional equity. It is a way to lift leverage when the senior debt has reached its limit but the deal still has value and a clear plan. It is commercial, business-purpose finance, not a consumer home loan.
A second mortgage is registered on a property title behind an existing first mortgage. If the property is sold or enforced, the first mortgagee is repaid before the second. That second-ranking position carries more risk for the lender, so a second mortgage is priced higher than the senior debt and usually depends on the first mortgagee consenting and on an intercreditor or priority arrangement being in place.
The drivers are the combined LVR across the first and second mortgages, the headroom in the property value behind the senior debt, the term, the strength of the exit and the first mortgagee's consent. Because it ranks behind the senior loan, a second mortgage costs more than the first. We do not advertise a rate or a leverage cap because both move with the senior position and the security. The structure only works where the combined gearing and the exit stack up.
Both rank behind a first mortgage, but a second mortgage is a registered security suited to larger, slightly longer facilities, while a caveat loan relies on a lodged caveat and suits smaller, faster, very short-term needs. A registered second mortgage gives the lender a stronger position, so it can support more leverage and a longer term than a caveat.
Second mortgage funding lives or dies on the senior lender's consent and a sound exit. We aim to structure it where the numbers and the consent stack up, manage the intercreditor position, and take it to lenders comfortable in a second-ranking position.
Usually yes. A second mortgage typically requires the first mortgagee to consent and to agree priority or intercreditor terms. Arranging both with that in mind makes it far smoother.
Because it ranks behind the first mortgage and is repaid only after the senior debt on a sale or enforcement. That higher risk is reflected in the pricing.
It depends on the equity behind the first mortgage and the combined LVR the lender will accept. There is no fixed cap; it is assessed on the property value and the exit.
Often, but not always. Many are short-term with a defined exit such as a sale or refinance, though longer structures are possible where the deal supports them.
Tell us about the project, the numbers, and the timeline. We will give you an honest read on whether we can fund it and what a suitable structure could look like. Email loans@bottomlinefinance.com.au or send the form.
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