Second Mortgage on Commercial Property

A second mortgage on commercial property sits behind the existing first mortgage and accesses the equity between the current first mortgage balance and the property's market value. The advantage over refinancing is that the first mortgage lender relationship is not disturbed. The borrower keeps their existing bank facility, often at favourable rates or under grandfathered terms they would lose if they refinanced, while accessing the capital they need through the second mortgage.

Who This Is For

• •Companies and trusts with an existing bank first mortgage wanting to access equity without refinancing the whole facility
• •Borrowers whose bank has declined an equity release or top-up on the first mortgage
• •Borrowers with favourable first mortgage terms they do not want to disturb by refinancing
• •Businesses needing to raise capital quickly against commercial property equity for a time-sensitive purpose
• •Borrowers using a second mortgage as a short-term bridge while a longer-term solution is arranged
• •Not available to natural persons borrowing in their personal name
• •Not available for residential property or any NCCP-regulated consumer lending

How We Assess Commercial Property Second Mortgages

Our assessment begins with the current market value of the commercial property and the outstanding balance of the first mortgage. The second mortgage amount is calculated so that the combined LVR across both loans does not exceed 70% of the property value. We arrange our own in-house valuation if a current independent valuation is not available.

We do not require consent from the first mortgage lender to register a second mortgage, though we confirm the first mortgage terms do not prohibit further encumbrances. Most standard commercial mortgage terms permit second mortgages subject to the combined LVR remaining within the agreed limit. We work with your solicitor to confirm the position before proceeding.

Submit your scenario with the commercial property details, the first mortgage balance, and the second mortgage amount required. Same-day indicative response. Letter of offer within 24 hours of agreed terms. Settlement from 24 to 72 hours for clean deals.

Three Second Mortgage Scenarios We Have Recently Helped

A Pty Ltd company held a commercial office building with a bank first mortgage at a fixed rate secured until the following year. The company needed $900,000 for a business opportunity. Refinancing would have broken the fixed rate at significant cost. We provided a second mortgage at 68% combined LVR. The company used the funds, then discharged the second mortgage when the fixed rate period ended and the bank could consolidate. Loan: $900,000, 14-month term.

A family trust owned an industrial property with a bank first mortgage at 38% LVR against current value. The trust needed to fund a tax debt quickly. The bank declined a top-up citing the purpose. We registered a second mortgage and released $650,000. The ATO liability was settled. The exit was the trust's annual bank review, at which point the bank consolidated the second mortgage into the first. Loan: $650,000, 9-month term.

A Pty Ltd company had an existing commercial property portfolio with two assets carrying bank first mortgages. It needed capital for a third acquisition. The bank declined an equity release on either existing property. We provided second mortgages across both properties simultaneously, releasing enough capital for the acquisition deposit and costs. Combined second mortgage: $1.4 million. Both facilities discharged when the company completed its bank review 11 months later.

Speed and Process Advantage

We hold direct credit authority with no external committee. Second mortgage registration, property valuation, and underwriting run concurrently. For borrowers who need capital from commercial property equity without the delay or disruption of a full refinance, we provide an indicative position the same day and can settle within 24 to 72 hours for clean deals. The second mortgage structure adds no material time to our standard process.

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