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Second mortgages

Second mortgage business loans in NSW

Updated Sept 2026 · Reviewed by The Lienhouse team

In NSW a business second mortgage is registered with NSW Land Registry Services behind the existing first mortgage. Since October 2021 the registry has not required the first mortgagee's consent to register it, although most bank mortgages still do. There is no mortgage duty, settlement is electronic, and indicative terms run up to around 75% combined LVR.

Key takeaway
NSW second mortgages register with NSW LRS without registry-level consent from the first mortgagee since 2021, but bank consent and a deed of priority are still normally obtained; no duty applies.

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NSW is the largest market for business second mortgages in Australia, driven by Sydney property values: a modest percentage of a Sydney asset is a large sum of working capital. The legal framework is straightforward.

Registration

The mortgage is a registered dealing under the Real Property Act 1900, lodged electronically through PEXA or Sympli with NSW Land Registry Services. It appears on title as a second registered mortgage, ranking by order of registration behind the first. A registered mortgagee has statutory powers, including a power of sale after default and the required notices, which is why a second mortgage is stronger security than a caveat and prices lower.

Before October 2021, NSW LRS required the written consent of the first mortgagee before it would register a later mortgage. That requirement was removed. Registration can now proceed without the bank’s involvement. Two things have not changed. The borrower’s contract with the bank still usually prohibits further security without consent, and second mortgage lenders still want a deed of priority to cap the bank’s priority amount. So consent remains the norm, but it is no longer a mechanical roadblock. See second mortgage without bank consent.

Costs

No mortgage duty. NSW LRS registration and discharge fees, electronic lodgement network fees, the lender’s legal costs, a valuation and the bank’s consent fee. The loan’s own pricing is indicatively from 0.975% a month with an establishment fee around 2% - see second mortgage interest rates.

NSW security notes

  • Strata. Common in Sydney. Lenders check the strata report for defects, special levies and litigation.
  • Company title. Not Torrens title. Security is over shares and needs the company’s consent, so it is handled differently.
  • Land tax. NSW land tax is a statutory charge on land and ranks ahead of mortgages, so arrears are cleared at settlement.
  • Regional NSW. Newcastle, Wollongong and the Central Coast are treated close to metropolitan. Smaller centres carry lower LVRs.

When a caveat suits better

Where the need is for weeks, not months, a caveat is faster. The NSW rules are in caveat loans in NSW, and Sydney market context is on the Sydney page. General information, not legal advice.

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FAQ

Do I need my first lender's consent in NSW?

Not for registration since October 2021. Your mortgage contract almost certainly still requires it, and second mortgage lenders usually want a deed of priority, so it is normally obtained.

Is there stamp duty on a second mortgage in NSW?

No. NSW abolished mortgage duty in 2016. Registration and discharge fees apply.

Can the security be a home in NSW?

Yes, if the loan is genuinely for business purposes. The owners must all sign, with independent legal advice for guarantors.

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Release equity from NSW property.

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