Fast private mortgages for business

A private mortgage is a loan secured by a registered mortgage over real property, from a lender that is not a bank. For a business purpose it is one of the fastest ways to raise a large sum in Australia: HomeSec writes first and second private mortgages of $20,000 to $5,000,000, assessed on the property and the exit rather than on financials, with no sworn valuation, an open term and funding in as little as 24 hours.

A bank mortgage and a private mortgage, side by side

The security is identical — a registered mortgage on the title. Everything around it is different, and the differences are what a business owner is actually choosing between.

Bank requirements described generally; individual banks vary. If you qualify for the bank and can wait for it, it is cheaper, and we will say so.

First or second position

We write both. A first mortgage where there is no existing lender, or where refinancing the existing one makes sense. A second mortgage where there is a good loan already in place that should not be touched — which is most of the time, because refinancing to release $300,000 can cost you the rate on $900,000. Combined lending stays within 80% of value on residential security or 70% on commercial. Where the date will not wait for a first mortgagee's consent, a caveat needs nobody's.

What private mortgages are used for

Releasing equity for working capital

The most common private mortgage. A second mortgage behind the bank, or a first over an unencumbered property, for stock, a contract, a season or the ATO.

Buying property when the bank cannot meet the date

A first mortgage over the property being purchased — commercial in any name, residential in a company name — settled to the vendor's timetable, refinanced by a bank afterwards at the bank's pace.

Refinancing out of a lender that has called the loan

A private first mortgage pays the bank out on the day, and the enforcement stops. The relationship ends on your terms.

Bridging between a sale and a purchase, for business

Where the exit is a signed contract, a private mortgage bridges to it with no repayments in between.

Consolidating expensive debts into one secured facility

Daily-debit loans, the ATO and creditors paid out behind the home loan, at a cost priced against property rather than risk.

Why it is faster than a bank

Because we assess different things. A bank assesses your capacity to service from trading income, which requires financial statements, tax returns and a credit file, and takes three to eight weeks. We assess the property and the exit. No sworn valuation is required — we form our own view of the security — which removes both a cost and roughly a week. And the decision is made here, by a Lending Manager, rather than by a committee on its own calendar. What makes a file fast, and what slows one down.

From the call to the money

The open term

No minimum, no maximum, no penalty for repaying early and no fee to extend. Most private lenders write one to twelve months with a three-month minimum interest period, which means a borrower finished in six weeks pays for three months anyway. We do not do that, because we fund our own loans and have no mandate requiring capital back on a date. Why the term is open, in full.

What it costs, and why we do not publish a rate

Private lending is genuinely risk-priced per file. Security type, LVR, position on title, the quality of the exit and how much documentation exists all move the number, so any single advertised rate is either a best case or a bait. What you get instead is a real figure in writing, on a Letter of Offer, before you have paid or committed to anything. How it is priced, and every fee that exists.

Reviewed by Jason Brockmuller, Joint Chief Executive