By the Loan Phone team Reviewed by Anthony Moncada, M.App.Fin, Cert IV Finance & Mortgage Broking
Chattel mortgage rates Australia wide typically range from 6-14% p.a. as of 2025, depending on your business’s trading history, financial strength, credit profile, and the asset type (indicative only). Established businesses with 2+ years of trading and strong financials may access rates from 6-9% p.a., while developing businesses or those financing older assets often see rates from 10-14%+ p.a.
Actual rates require individual assessment. Modern comparison platforms allow businesses to receive personalized rate quotes from over 100 lenders efficiently, ensuring you find an optimal rate.
| Business Profile | Indicative Rate Range | Typical Asset Type |
|---|---|---|
| Established (2+ years, strong) | 6-9% p.a. | New vehicles, standard equipment |
| Standard (1-2 years trading) | 9-12% p.a. | Standard commercial assets |
| Developing or specialist assets | 12-14%+ p.a. | Older or specialist machinery |
All rate ranges are indicative examples only and depend on individual circumstances.
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Understanding Chattel Mortgage Rates
Chattel mortgage rates are the annual interest charged on funds borrowed to purchase a business asset. Unlike a fixed price, rates are tailored to each borrower based on a lender’s risk assessment. This means two businesses buying identical equipment may receive different rates. For more detail, see our complete chattel mortgage guide.
Factors Affecting Your Rate
Your interest rate is determined by a combination of factors, including:
- Business Trading History: Lenders prefer at least 1-2 years of history.
- Financial Strength: Strong revenue and cash flow lead to better rates.
- Credit Profile: Both business and director credit scores are assessed.
- Asset Type & Age: New, standard assets typically receive lower rates than older, specialist equipment.
- Loan Structure: The deposit amount, loan term, and loan size all influence the final rate.
Rate Comparison: Banks vs Specialists
Different types of lenders cater to different business profiles, which is reflected in their rate ranges.
| Lender Type | Typical Rate Range | Target Market |
|---|---|---|
| Major Banks | 6-10% p.a. | Established businesses with strong financials |
| Specialist Lenders | 8-14% p.a. | Broader market, including developing businesses |
| Non-Bank Lenders | 9-15% p.a. | Alternative lending, varied credit accepted |
Fixed vs Variable Rates
The vast majority of chattel mortgages in Australia use fixed interest rates. This provides certainty for your business by locking in your repayment amount for the entire loan term, protecting you from market fluctuations. Variable rates are uncommon for this type of finance.
Total Cost Considerations
The interest rate is only one part of the total cost. When comparing loans, always consider:
- Fees: Establishment fees, monthly account fees, and PPSR registration costs.
- Loan Structure: How the term length and balloon payment affect the total interest paid.
- Tax Benefits: The after-tax cost is reduced by deductions for interest and depreciation.
A loan with a slightly higher rate but lower fees might be cheaper overall. For detailed examples, see our chattel mortgage calculator guide.
Getting the Best Rate
To secure the most competitive rate, it’s essential to compare multiple lenders. Rate variations can be 2-4% p.a. for the same scenario, which translates to thousands of dollars over the life of the loan. Using a comparison platform streamlines this process, allowing you to see offers from over 100 lenders with a single application.
Frequently Asked Questions
Are chattel mortgage rates fixed or variable? Almost all are fixed, providing predictable repayments and protection from rate increases.
Why do rates vary so much between lenders? Lenders have different risk appetites. A major bank might offer low rates to a prime borrower, while a specialist lender might provide a solution for a newer business at a higher rate.
How does my credit score affect my rate? Significantly. An excellent credit score can help you secure a prime rate (6-9% p.a.), whereas a varied credit history may result in a higher rate (10-14%+ p.a.).
What is the difference between an interest rate and a comparison rate? The interest rate is the cost of borrowing. The comparison rate adds most fees and charges to the interest rate, providing a more accurate measure of the loan’s total cost. Always compare the comparison rate.
Compare Chattel Mortgage Rates
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Related Resources
Explore these related guides to learn more about business asset financing options:
Disclaimer: This article provides general information only and should not be relied upon as financial or tax advice. Rates, terms, and eligibility vary by lender and individual circumstances. Tax benefits are subject to your specific situation and business structure. Always seek independent professional advice from a qualified accountant and financial adviser before making financing decisions.
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Last updated: October 17, 2025