How do you calculate Chattel Mortgage repayments?

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If you are self-employed or a business owner, getting a chattel mortgage can be a sensible option for your business transport needs. Speak to your accountant about your vehicle finance options to make sure you select the optimal car loan for your commercial structure.

A chattel mortgage does come with a number of tax benefits, as well as lower rates than a regular personal car loan, so it is worthwhile calculating your chattel mortgage repayments and comparing your options.When you've decided that a chattel mortgage is the best car loan type for you, you can compare different loan structure options by calculating your chattel mortgage repayments.

Knowing how much your regular repayments will be, and what your loan term is, can help you to structure your business finances optimally.

Using a Chattel Mortgage Calculator

A chattel mortgage calculator is the quickest and easiest way to calculate your repayments. You can simply put in your loan term, total loan amount, and whether you are buying a new or a used vehicle for an instant estimate of your weekly, fortnightly or monthly repayments.

When should I use a Chattel Mortgage Repayment calculator?

There are a few circumstances when calculating your chattel mortgage repayments can help you to make a smart car finance decision:

1. Taking out your first business car loan

If you are self-employed or a business owner, getting a chattel mortgage can be a sensible option for your business transport needs. Speak to your accountant about your vehicle finance options to make sure you select the optimal car loan for your commercial structure.

A chattel mortgage does come with a number of tax benefits, as well as lower rates than a regular personal car loan, so it is worthwhile calculating your chattel mortgage repayments and comparing your options.

2. Comparing chattel mortgages to other car finance options

Sometimes it's tricky to decide which car finance option is going to work out best for you. By calculating your chattel mortgage repayments and comparing it to the other loan options, you can be confident that your final choice will fit within your cash flow comfortably.

3. Refinancing your current chattel mortgage

If you've had your chattel mortgage for 12 months or more, there could be a lower rate available on the market. Find out if refinancing could save you money by calculating your potential refinance chattel mortgage repayments, and comparing them to your current repayment amount.

You can also refinance your chattel mortgage when the vehicle you currently have isn't meeting your exact needs, and you want to upgrade to a different model. Calculating your new chattel mortgage repayments will give you a clear indication of how changing your vehicle will affect your business cash flow.

Important chattel mortgage terms to know:

  • Loan Amount: this is usually the purchase price of the vehicle, or the amount that you will borrow to purchase the car if you have paid a deposit or arranged to have a balloon payment at the end of the loan term. It isn't the total cost of the loan, but just the amount that you contract to borrow.

  • Loan Term: the period of time that you have to repay the loan amount. Usually, when you choose a longer loan term, your repayments will be lower.

  • Interest Rate: the interest rate is the rate you pay to borrow your loan amount from the lender for the period of the loan term. This cost is included in your loan repayments.

  • Loan Deposit: this is the down payment you make to secure your car purchase. You won't generally be required to pay a loan deposit, but if you do choose to, it will reduce your total loan amount and your loan repayments.

  • Balloon or Residual Payment: you can choose to pay a lump sum at the end of your loan term. This reduces your loan repayments during the loan term.

  • Repayment Frequency: your loan repayment amounts are determined by your repayment frequency - if you make repayments more often your repayment amount will be lower. You can usually choose to pay weekly, fortnightly or monthly.

    Some lenders also offer a flexible loan repayment structure where you make repayments when your seasonal cash flow comes in. If this structure would suit you, then mention this to your lending manager.

  • Repayment amount: you can calculate your repayment amount using a chattel mortgage repayment calculator. Your repayment amount is determined by all the factors listed above.

Understanding secured car loans

A chattel mortgage is secured against the vehicle that you buy. This means that the lender registers an interest against your vehicle for the duration of the loan term. You will still own the vehicle outright, but if you decide to upgrade or sell, you will have to pay back the full loan amount at this time.

The reason that a chattel mortgage is secured in this way is to reduce the risk to the lender, which means that you get a better interest rate.

Chattel Mortgage Case Study:
Jonas drives his old ute to work every day, loaded with the tools he needs as a painter. He's working for himself and has a registered ABN and two years worth of BAS statements.

He's picked out a second-hand Toyota Hilux for $35,000. Jonas has a $3000 deposit, so he will only need to borrow $32,000.

Using the chattel mortgage repayment calculator, he finds that his weekly repayments will be $271 per week. This fits into his budget, and he applies for the loan.


If you can relate to Jonas story, and you think that a chattel mortgage could be right for you, then try our chattel mortgage calculator and see how you can find the best car loan now.

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