Saturday, May 12, 2012


What is a chattel mortgage?

A chattel mortgage is a popular form of car financing that allows the borrower to take ownership of the car at the commencement of the chattel mortgage. A chattel mortgage is sometimes referred to as a goods mortgage.

What does chattel mean?

Chattel is any article of movable property, but when it comes to chattel mortgages it is most often a car or other vehicle. Business equipment is also commonly financed with a chattel mortgage.

What are the benefits of a chattel mortgage?

A chattel mortgage offers tax benefits for businesses that use the cash accounting method. The interest rate on a chattel mortgage is fixed so you never need to worry about rate rises. A chattel mortgage is flexible you set your deposit, repayment and balloon payments to suit your cashflow. A chattel mortgage can be repaid before the end of the term. Subject to the lenders' approval, 100% of the purchase price of a car can be financed using a chattel mortgage.

How does a chattel mortgage affect my tax?

If you use the cash accounting method, a chattel mortgage enables you to claim back the GST component. If the car is used for business purposes, interest paid on the chattel mortgage and depreciation can be a tax deduction.

Is a chattel mortgage right for me?

A chattel mortgage may suit you if:

you want to purchase a car primarily for business use your business uses the cash accounting method you are looking for flexible car finance to suit your cashflow.

Do I pay interest on a chattel mortgage?

Yes, the interest rate on a chattel mortgage is fixed, so you know exactly what your repayments will be for the life of the loan.

Can a chattel mortgage have a small or no balloon payment?

The flexibility of a chattel mortgage means you choose whether you want low monthly repayments and a high balloon payment, or higher regular repayments and a low or no balloon payment. This means your chattel mortgage repayments can be tailored to suit your cashflow.

Can I use a chattel mortgage for something other than a new car?

Yes, a chattel mortgage can be used for financing a boat, truck or equipment used primarily for business purposes.

What happens if I miss a repayment on my chattel mortgage?

Because a chattel mortgage is a secured loan, the lender can sell the car to recover the debt. If you are having difficulties making repayments, please contact your lender or 360 Financial as soon as possible to avoid this happening.

How do I apply for a chattel mortgage?

Contact 360 Financial Services or apply online for a chattel mortgage.

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