Formation Finance

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Second Mortgage Loans
Second mortgage loans to unlock your property’s equity today.

Home - Services - Second Mortgage Loans

Second Mortgage Loans in Australia (Business & Investment Purposes)

Second mortgage loans from Formation Finance are designed to unlock the value of your property to fund business growth, development projects, or strategic investments, while keeping your existing first mortgage.

Designed for property developers, professional investors, and business owners, our second mortgage solutions offer fast access to capital with flexible terms and lending structures.

Our second mortgage options fall under our flexible private lenders loans solutions and are ideal for those seeking short-term property loans with speed and adaptability.

Second Mortgage Loans Quick Snapshot

Key Features Indicative Range
Loan amount $100k – $5M+ (case-by-case)
Term 3 – 24 months
Up to LVR Up to 75% (total LVR, depends on security & exit strategy)
Repayment options Interest-only or capitalised interest (structure varies by deal)
Typical timeframe Same-day indicative assessment • Settlement typically 7–14 business days (after valuation & required documents are received)

All figures are indicative only and not an offer of finance. Availability, terms and timing are subject to valuation, security, lender approval, legal/settlement requirements and receipt of required documentation. For business and investment purposes only.

Second Mortgage Loans vs Refinance vs Caveat Loans

  Speed Security Best for Key limitation
Second Mortgage Loans Medium to Fast, usually 7-14 business days Registered mortgage on title, second priority behind the first lender Short-term funding where you have property equity and a clear exit plan Scheduled behind the first mortgage, and may require coordination with the first mortgagee
Refinance Much slower, usually takes weeks New or replaced first mortgage Longer-term financing which is better for people who want lower ongoing costs or longer repayment terms Timing is the biggest constraint, and lender processes can be much slower
Caveat Loans Fast, usually a couple days Caveat is lodged on title which is different from a registered mortgage Very short bridging needs that need the funds in a limited time Shorter terms and more restrictive structures, and not suitable for every title

Quick decision guide:

1. If you need longer-term money and is not in a rush, choose Refinance.

2. If you need short-term funding with clear equity and a defined exit, choose Second mortgage loans.

3. If you need urgent funds and can exit very quickly, choose Caveat loans.

Strategic Uses for Second Mortgages

Our clients commonly use second mortgage finance to:

  • 💼 Fund development projects or site acquisitions

  • 🏗️ Bridge short-term liquidity gaps between construction phases or settlements

  • 📈 Inject working capital into growing businesses

  • 💸 Consolidate business debt or refinance private lending

  • 📊 Access capital for investments without refinancing the first mortgage

“Our Sydney client secured a $1.4M second mortgage in 3 days to bid on a development site while finishing current project – new site secured while current project gets sold at a price 20% higher than rushed sale”

Our Second Mortgage Loans Process

  1. Quick assessment – We confirm your property, funding purpose, and exit strategy.

  2. Documents checklist – We will need you to provide the key documents for us to assess the deal.

  3. Indicative terms – We issue indicative terms based on the initial review.

  4. Valuation & due diligence – Valuation is completed and the file goes through required checks.

  5. Legal / priority coordination – Lawyers coordinate documentation and any priority requirements.

  6. Formal approval – Final terms are confirmed and the loan is approved subject to settlement.

  7. Settlement – Documents are signed, settlement completes, and funds are released.

Why You Should Choose Second Mortgage Loans?

🚀 Speed Meets Simplicity

Banks drown you in paperwork. We focus on asset value, not credit history.

  • No income checks – Ideal for trusts/companies with complex cash flow

  • No credit checks – Past defaults? Irrelevant if your equity stacks up

  • Funds in 7 days – Direct access to family office lenders cuts delays

Second Mortgage Loans

💼 Cost Effectiveness Overall

Why Get a Second Mortgage Loan:

  • Keep your existing cheap first mortgage for long term

  • Only pay higher interest rate on second mortgages’ smaller dollar value

  • Save on big upfront fees and paperwork from refinance

Second Mortgage Loans FAQ

A second mortgage loan is a secured loan that sits behind your primary mortgage and allows you to access the equity in your property without refinancing. It’s commonly used for business purposes, such as funding property developments, expanding investments, or injecting working capital into a business.

It depends on your situation. Refinancing replaces your existing loan and may offer better rates, but it often involves longer approval times, full credit checks, and income verification. It’s ideal if you’re looking for a long-term loan restructure.

A second mortgage, on the other hand, lets you access equity quickly without disturbing your current mortgage. It’s typically faster, more flexible, and better suited for short-term business, investment, or development funding—especially if you need short-term funding and need it quickly.

Second mortgage loans are ideal for:

  • Property developers needing short-term capital for acquisitions or construction

  • Professional investors looking to leverage existing equity

  • Business owners who require funding without disrupting their first mortgage

If you’re asset-rich but need quick liquidity, a second mortgage could be a strategic option.

Loan amounts typically range from $100,000 to $5 million+, depending on the equity available, the property type, and the loan purpose. In some cases, higher loan amounts can be structured for strong projects or portfolios.

We accept a wide range of security types, including:

  • Residential (investment or owner-occupied)

  • Commercial (offices, retail, warehouses)

  • Industrial

  • Development sites (with or without DA)

Multiple securities can also be bundled to maximise your borrowing capacity.

We can settle most second mortgage loans within 5–10 business days, and urgent deals can be processed in as little as 48 hours, depending on the complexity and documentation provided.

While requirements vary depending on the deal, we typically require:

  • Property details & estimated value

  • First mortgage statement

  • Corporate borrowing entity (company/trust) 

  • Loan purpose and proposed exit strategy

Yes. Second mortgage loans are commonly used for land banking, bridging between project stages, or even settling purchases prior to construction finance. They provide strategic flexibility for time-sensitive opportunities.