Short answer: A caveat loan is a short-term business loan secured against property you already own. Under the loan contracts it is a second mortgage loan: in Victoria a caveat is lodged so the money can move the same day, and everywhere else the loan settles straight onto a registered second mortgage. Funding takes as little as 24 hours, often without financials.
How a caveat loan works
When you take a caveat loan, you agree to let the lender lodge a caveat on your property's title. The caveat warns anyone searching the title that the lender has an interest, so the property can't be sold or refinanced without dealing with the lender first.
A caveat is not a different kind of loan. Under the loan contracts a caveat loan is a second mortgage loan — the caveat is what lets the money reach you inside a day, and the mortgage is registered behind it. In Victoria that is how these loans settle. In every other state and territory we go straight to a registered second mortgage, which is one step instead of two and means less legal cost for you.
When a caveat loan makes sense
- You need funds within days, not weeks
- You have equity in property but no time (or no current financials) for a bank
- You have a clear exit: a sale, refinance, payout or incoming payment
- You want to leave your existing home loan untouched
How fast can a caveat loan settle?
With us, caveat loans can be funded in as little as 24 hours. The steps are an eligibility check (60 seconds), confirming ownership and equity (often a desktop valuation), a written offer, electronic signing, settling on the title and funding.
Caveat loan vs second mortgage
They are not two products. A caveat loan is a second mortgage loan — the caveat is how it settles quickly, and only in Victoria is that step needed. Read the full comparison.
What does a caveat loan cost?
Priced per file rather than from a rate card. Four things do most of the work: the equity behind your existing mortgage, the term and how strong the exit is, the property type and location, and how clean the title is.
The costs that can appear are the interest, an establishment fee, legal and title costs, a valuation where one is needed, and a discharge cost at the end. Ask for all of them in writing before you sign, including what applies if the exit runs late — that last one is the question that separates lenders most and the one almost nobody asks. Every cost explained →
When is a caveat loan the wrong choice?
When there is no exit. A caveat loan is short-term money against an asset, repaid by a defined event — a settlement, a contracted payment, a sale, a refinance already underway. Borrowing against your property to fund ongoing losses with no identified way out does not solve the problem; it adds a secured creditor to it.
It is also the wrong choice when nothing has a date. If the need is permanent rather than temporary and your file would pass at a bank in six weeks, the bank is cheaper and the right answer. Any lender worth using will say so rather than write the loan.
Frequently asked questions
Is a caveat loan the same as a second mortgage?
Yes. Under the loan contracts a caveat loan is a second mortgage loan. The caveat is a fast way of settling one, and only Victoria requires that step.
Can I still sell or refinance the property?
Yes, but the loan has to be repaid out of the proceeds. That is usually the plan anyway, since a sale or refinance is the most common exit.
How long can a caveat loan run?
Short term by design, typically a few months to a year or two, matched to when the exit actually happens rather than to how long you could tolerate it.
What happens when I repay?
In Victoria the caveat is withdrawn and the second mortgage discharged. Everywhere else the second mortgage is discharged. The cost of doing so should be in your original offer, not raised at payout.
Do I need financials or tax returns?
No. The assessment is on the equity in the property and on how the loan will be repaid.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
