Calculator
Caveat loan and second mortgage calculator
See what a short-term secured business loan really costs: interest, fees, the cash you receive at settlement, what you repay at the end, and whether it fits inside the lending limit.
Your numbers
Default rates and fees are the indicative entry figures from our rates and fees page. Change any of them to match an offer you have been given.
- Interest for the term
- Establishment fee
- Legal and valuation
- Total cost of the loan
- Cost as a yearly rate
- Monthly interest payment
- You repay at the end
Indicative only and not an offer of finance. For companies and trusts, business purposes only. Nothing you type here is sent anywhere.
How the calculator works
Private loans secured by a caveat or a mortgage are nearly always interest only. The interest is a simple monthly rate on the loan amount, the lender charges an establishment fee as a percentage of the loan, and legal and valuation costs are passed on at cost. Those three lines are the whole cost of the loan, and the calculator adds them up for the term you choose.
Why net cash matters more than the rate
The establishment fee, the costs and any prepaid interest are deducted from the loan at settlement. On a $300,000 caveat loan for three months with interest prepaid, around $27,000 comes off the top. If you need a specific amount in hand, the line under the results shows roughly what you would have to borrow to get it. More detail is in capitalised and prepaid interest.
The lending limit
Lenders measure the combined loan to value ratio: every loan secured on the property, including the new one, divided by its value. Indicative limits are 65% for caveat loans, 75% for second mortgages and 70% for first mortgages. If the result shows you are over the limit, the options are a smaller loan, a second security property, or a different product. See what LVR can I borrow.
What the calculator leaves out
- Default interest, which applies if the loan runs past its term. See default interest rates.
- Minimum interest periods and any extension fees in a particular offer.
- Broker or arrangement fees, if someone is charging one.
- The tax deduction most businesses can claim for interest and borrowing costs.
To line up two real offers side by side, use the checklist in how to compare private loan offers.
Common questions
How is interest on a caveat loan or second mortgage calculated?
Private loans are usually interest only, charged as a simple monthly rate on the loan amount. A $500,000 loan at 1% a month costs $5,000 a month. If interest is capitalised, each month is added to the balance and the next month is charged on the higher figure, so the total is slightly more.
What is the difference between prepaid, capitalised and serviced interest?
Prepaid interest is deducted from the loan at settlement, so you receive less cash and make no monthly payments. Capitalised interest is added to the balance and paid at the end. Serviced interest is paid monthly from your cash flow. The calculator shows the net cash and the payout figure for each.
How much can I borrow?
It depends on the combined loan to value ratio: your existing mortgage plus the new loan, divided by the property value. Indicative limits are 65% for a caveat loan, 75% for a second mortgage and 70% for a private first mortgage. Prepaid interest and fees sit inside that limit.
Is this a quote?
No. The default rates are the indicative entry rates on our rates and fees page. Your rate depends on the security, the LVR, the term and the exit, and legal and valuation costs vary by property. This lending is for companies and trusts, for business purposes only.
Enquire
Want real terms on these numbers?
Send the amount, the asset and the timeframe. We’ll match you with a funder who comes back with indicative terms.