Chattel Mortgage
Own from day one
- Ownership from day one; asset on your balance sheet
- Fixed or variable rate; optional balloon to lower repayments
- Common for vehicles, equipment and machinery
The four main structures
Compare the main asset finance options in Australia
Asset finance in Australia spans several structures with different ownership, accounting and cash flow outcomes. This page lays out the main options side-by-side so you can compare quickly, then dive deeper into the product or asset class that fits — the right structure depends on whether you want ownership on day one, lower repayments via a residual/balloon, or flexible replacement cycles. When you’re ready, ask for help and we’ll guide you through the pros and cons for your use case.
Hire Purchase
Repay to ownership
- Repay to eventual ownership at term end
- Similar cash flow to chattel mortgage; different tax timing
- Useful where specific accounting/tax outcomes are preferred
Finance Lease
Use now, residual at end
- Lessor owns the asset; you pay to use it
- Includes a contracted residual value at term end
- Accounting: under AASB 16/IFRS 16, most leases are on-balance sheet (except certain short-term/low-value exemptions)
Operating Lease
Use, return or upgrade
- Pay to use; return/upgrade at end (subject to agreement)
- Often includes maintenance/fleet options
- Accounting under AASB 16 also generally recognised on balance sheet unless exempt
Need a quick steer? Share the asset type, budget and preferred term and we’ll flag likely structures in minutes. Get tailored help.
Compare the four main structures side-by-side
Use this comparison to see how chattel mortgage, hire purchase, finance lease and operating lease differ on the factors that usually drive the decision: ownership, GST timing, tax deductions, balance-sheet treatment and end-of-term outcomes.
| Factor | Chattel Mortgage | Hire Purchase | Finance Lease | Operating Lease |
|---|---|---|---|---|
| Ownership during term | You own · day 1 | Financier | Lessor | Lessor |
| Ownership at end | Already yours | Transfers after final payment | Pay residual / refinance / trade | Return, extend or upgrade |
| Balance sheet (AASB 16) | Asset + loan liability | Asset + HP liability | Right-of-use + lease liability | Right-of-use + lease liability (low-value / short-term exemptions) |
| GST claim timing | Up front on purchase price | Up front on purchase price (agreements from 1 Jul 2012) | On each lease payment | On each lease payment |
| Typical tax deductions | Interest + depreciation | Interest + depreciation | Lease payment portion | Lease payment portion |
| Balloon / residual | Optional 0-30% | Optional 0-30% | Contracted residual at end | Set return value / extension terms |
| Typical rate range (p.a.) | 6.5% - 12% | 6.5% - 12% | 7% - 13% | 7% - 13% (often bundled) |
| Best suited to | Long-life assets where ownership matters | Similar to chattel mortgage; some tax timing differences | Newer assets with a planned upgrade | Fast-changing tech, fleet replacement |
Rates & example repayments
Asset finance rates in Australia and example repayments
Indicative asset finance rates in Australia typically range from about 6.99% p.a. to 14.99%+ depending on asset age, business profile, loan term, documentation, and residual/balloon settings. Strong, well-documented applications for standard assets price toward the lower end; specialist, older or low-doc scenarios price higher.
6.99–9.99%
New vehicles and common equipment with full docs
9.99–14.99%+
Used assets, specialty machinery or lower docs
Case-by-case
Low doc, startup or adverse credit — pricing varies widely
Example repayment (illustrative only): $50,000 over 5 years at 9.49% p.a. with a 20% residual/balloon ($10,000)
≈ $920 / mo ($212 / week)
Important: Rates and repayments are indicative and subject to lender assessment, fees and your business profile. Total interest depends on your exact approval profile and fees. This is not a quote.
Detailed explainers
Detailed topic explainers
Deep guides to the specific Australian asset finance topics readers ask us about most often. Each is built on primary sources (ATO, ASIC, AFCA, AFSA, AASB) and reviewed regularly.
Instant Asset Write-OffThe $20,000 threshold, what qualifies, the $19,999 vs $20,001 cliff, and how it interacts with chattel mortgage.
Novated LeaseHow three-way salary-sacrifice arrangements work, FBT mechanics, the ECM, and the EV FBT exemption.
Electric Vehicle FinanceFour paths to finance an EV, when each wins, LCT threshold, depreciation car limit, state incentives.
PPSR ExplainedThe Personal Property Securities Register: what it is, PMSI super priority, searching and discharging.
Sole Trader Asset FinanceDocumentation, rate bands, GST registration impact and best-fit structures by sole trader profile.
Broker vs Going DirectCost, lender access, decision matrix and how to choose a broker if you go that path.
Asset Finance Rate Index (Q2 2026)Our quarterly modelled index of Australian asset finance rates across structures, by borrower tier. Eight quarters of history. CSV/JSON downloads.
Tax and GST notes (Australia)
- GST: For most asset purchases, input tax credits may be claimable subject to ATO rules and the entity’s GST status. See ATO GST guidance.
- Deductions: Interest (or finance charges) and depreciation/lease payments may be deductible depending on structure and usage. Speak with a tax adviser.
- Instant asset write-off and depreciation rules change over time; confirm current thresholds and eligibility with the ATO or your accountant.
- Accounting: Under AASB 16/IFRS 16, most leases are recognised on balance sheet except short-term or low-value exemptions.
Authoritative references:
Popular pages by structure and asset type
Choose the asset or structure first, then explore supporting pages for rates, requirements, approval time, GST and tax.
Chattel Mortgage
Ownership from day one with optional balloon. Hire Purchase
Repay to ownership; alternative tax timing. Finance Lease
Use the asset, pay residual at end of term. Operating Lease
Use, return or upgrade per agreement. Equipment Finance
Tech, medical, hospitality, manufacturing. Vehicle Finance
Cars, utes, vans and fleets. Machinery Finance
Excavators, forklifts, earthmoving. What Is Asset Finance?
Deep dive on how it works in Australia. Car Finance
Business use vehicles and novated options. Truck Finance
Heavy vehicles and trailers. Fleet Finance
Multi-vehicle, replacement cycles. Medical Equipment
Imaging, dental, practice fitouts. IT Equipment
Servers, laptops, software bundles. Manufacturing
Plant and industrial equipment. Agricultural
Farm machinery and implements.
Ownership from day one with optional balloon. Hire Purchase
Repay to ownership; alternative tax timing. Finance Lease
Use the asset, pay residual at end of term. Operating Lease
Use, return or upgrade per agreement. Equipment Finance
Tech, medical, hospitality, manufacturing. Vehicle Finance
Cars, utes, vans and fleets. Machinery Finance
Excavators, forklifts, earthmoving. What Is Asset Finance?
Deep dive on how it works in Australia. Car Finance
Business use vehicles and novated options. Truck Finance
Heavy vehicles and trailers. Fleet Finance
Multi-vehicle, replacement cycles. Medical Equipment
Imaging, dental, practice fitouts. IT Equipment
Servers, laptops, software bundles. Manufacturing
Plant and industrial equipment. Agricultural
Farm machinery and implements.
Special scenarios
Head-to-head comparisons
Why businesses seek help
- Choosing between ownership now vs flexibility later
- Lowering repayments with a residual/balloon while managing total cost
- Deciding between a new facility and refinancing an existing one
- Understanding documentation, approval timing and rate drivers
- Aligning structure with accounting and tax advice
Get tailored help
Tell us about the asset
Share the asset type, budget and preferred term and we’ll outline likely structures, indicative rates and next steps.
- No obligation — general guidance, not a credit application
- We aim to reply within one business day
- Your enquiry is confidential
Prefer not to use a form? Email [email protected]
Fast answers: FAQs on asset finance in Australia
Which assets qualify for asset finance?+
Commonly financed assets include vehicles (cars, utes, vans, trucks), plant and machinery (excavators, forklifts, earthmoving), medical and dental equipment, IT/office equipment, and certain fitouts. Lenders prefer assets with identifiable serial numbers and strong resale value.
What documents do I need?+
Full-doc deals typically need identification, ABN/ACN, recent bank statements, BAS/financials, asset quote/invoice and insurance. Low-doc deals may rely on bank statements, an accountant’s letter and asset details. Startups may need a business plan and cash flow forecast.
How long does approval take?+
Well-documented standard assets can see same-day to 48-hour approvals. Complex, used or specialty assets may take 3-7 business days. Allow time for valuation, invoices, insurance and settlement paperwork.
How do balloons/residuals work?+
A balloon (loan) or residual (lease) lowers ongoing repayments by deferring part of the principal to the end. You can pay it out, refinance it, or trade/upgrade (subject to the agreement and asset value).
Is GST claimable?+
GST treatment depends on the structure and your GST registration. Many businesses can claim input tax credits on the purchase price or on each lease payment. Confirm details with the ATO or your accountant. See ATO GST guidance linked above.
Will this be on my balance sheet?+
Loans like chattel mortgage generally recognise the asset and liability on balance sheet. Under AASB 16/IFRS 16, most leases are also recognised on balance sheet except short-term or low-value exemptions. Confirm treatment with your accountant.
Can startups or bad credit be approved?+
Yes, case-by-case. Expect tighter asset age limits, more deposit, higher pricing or additional support docs. See our pages for startup equipment finance and bad credit asset finance.
What terms are common?+
Terms typically range 24-60 months. Residual/balloon settings vary with asset life and lender guidelines. See detailed pages on loan terms for each structure.
Learn more by topic
How Asset Finance Works
Step-by-step from quote to settlement. Asset Finance Rates
What moves pricing up or down. Requirements
Docs and eligibility. Approval Time
How long and what to expect. GST Treatment
Input credits by structure. Tax Benefits
What may be deductible. Balloon/Residuals
Set the end-of-term balance. Loan Terms
Match to asset life. Who Qualifies
ABN, credit, industry. Credit Score
What lenders look for.
Step-by-step from quote to settlement. Asset Finance Rates
What moves pricing up or down. Requirements
Docs and eligibility. Approval Time
How long and what to expect. GST Treatment
Input credits by structure. Tax Benefits
What may be deductible. Balloon/Residuals
Set the end-of-term balance. Loan Terms
Match to asset life. Who Qualifies
ABN, credit, industry. Credit Score
What lenders look for.
Author and editorial standards
Authored and maintained by: the Asset Finance Help editorial team. We publish under organisational authorship; for our review and correction process see our Editorial Policy.
Last updated: 1 June 2026