Chattel Mortgage

When you select a chattel mortgage, the lender effectively loans you the funds to purchase the vehicle so you can accept ownership of the car (known as chattel) when your make the purchase while the lender effectively takes a ‘mortgage’ over the vehicle as security for the loan.

You repay the mortgage (loan) on a monthly basis.

The repayment period of chattel mortgages is traditionally 12 to 60 months with a residual (balloon) paymentdue at the completion of the repayment period. This minimises the monthly repayments. When you have finalisedall the payments including the residual, you take complete ownership of and the lender no longer retains tsecurity over the loan.

This option is suitable for those who use a cash method of accounting; some or all of the GST can be claimed; tax deduction is available when the vehicle is used for business purposes

The chattel mortgage features include a fixed interest rate; set monthly repayment; residual; repayment terms over one to seven years