Chattel Mortgage

Want to purchase a motor vehicle for business use? Want flexible payments to take into account seasonal income fluctuations? Would you like ownership of the motor vehicle now, rather than after it's paid off which is the opposite of leasing? Chattel Mortgage might be right for you.

NFC National Finance Corporation are not just mortgage brokers, we are full service finance brokers specialising in all forms of motor vehicle and equipment financing. NFC have many equipment finance lenders available to source funding that suits you and your business' needs.

Motor Vehicle Chattel Mortgage

One of the main differences between Motor Vehicle Chattel Mortgage and leasing is that the purchasing entity (company, trust or personal) have 100% ownership from day 1 rather than gaining equity in the vehicle with each rental payment and not owning the asset until the loan is paid off. Chattel Mortgage products may be of benefit to business customers (NFC always recommend you speak with your accountant/tax advisor prior to making a decision). So if you use your car for business and want flexible repayments to suit your cash flow, would like immediate ownership of the asset and the option of claiming back the full input tax credit, then Motor Vehicle Chattel Mortgage could be the best option for you.

In most cases you can choose to either finance the whole purchase or pay a deposit up front. You can also choose to include residual/balloon payments up to any amount at any time during the rental period, so you can own the car sooner. NFC can discuss and calculate the differences and impacts on cash flow and disposal of vehicle loss risks associated with varied residual payments. 

Terms Explained by NFC

Residual - the amount of money owing at the end of the loan term.
Balloon - same as residual
Term - years of credit contract

When you hear the term "3 years and 50" or "5 years and 30", the loan term and residual are what are being spoken. This simply means a 3 year loan term with 50% residual or a 5 year loan term and a 30% residual. For example, a chattel mortgage motor vehicle loan of $50,000 over a 5 year term with a 30% residual would mean you still owe $15,000 at the end of 5 years. You are in essence assuming the motor vehicle will be worth more than $15,000 after 5 years to ensure that there is no loss at that time.