The short answer: a caveat loan is a fast, short-term loan for a company or trust, secured by a caveat lodged on the title of property you already own. It sits behind your existing mortgage — there’s no refinance — and it’s assessed mainly on your equity and a credible exit rather than full financials, which is why it can settle in days.
How does a caveat loan work?
A caveat is a legal notice recorded against a property’s title under the Torrens system. It signals that someone holds an interest in the property, and while it’s in place the property can’t be sold or refinanced without that interest being dealt with. A caveat loan uses that mechanism as security: a caveat is lodged on your title, the funds are released, and the caveat is removed once the loan is repaid.
Because a caveat is a lighter instrument than a registered mortgage, it can be put in place quickly — and it doesn’t disturb your first mortgage, which stays exactly where it is. That’s the core appeal: you raise capital against equity you’ve already built, without unwinding a good first-rate facility or waiting on a bank’s full credit process.
Two things matter more here than your trading history: how much equity sits in the property, and how you’ll repay it (your exit). Interest is often capitalised — added to the balance and settled at the end of the term — so a short facility may carry no monthly repayments.
What can a caveat loan be used for?
Almost any genuine business purpose. Common ones include:
- Clearing ATO or tax debt before enforcement escalates
- Bridging a settlement gap — buying before a sale completes
- Covering urgent working capital or a payroll shortfall
- Funding stock, equipment or a time-sensitive deal
- Consolidating higher-rate short-term debt
The security is your property; the money itself can go wherever the business needs it. What a caveat loan isn’t is consumer finance — it’s structured for business purposes, for companies and trusts, not for personal spending.
How much can you borrow, and what does it cost?
Borrowing is driven by your available equity — the gap between the property’s value and what you still owe — rather than your income. Indicative Lienhouse terms run from around 1.65% per month over 1–6 months, secured against property and subject to assessment. Rates sit above a bank term loan because the funding is fast, short and equity-based; the trade is speed and access, not the cheapest headline rate.
Treat any range as representative — your actual terms depend on the security, the loan-to-value ratio and the exit. See rates and fees for current indicative numbers.
How fast can a caveat loan settle?
Often within 24–48 hours once there are clear security details and a clear exit, sometimes same-day on a clean file. Lodging a caveat is quicker than registering a mortgage, and the assessment leans on the property rather than reams of financials — which is the whole reason the product exists.
The realistic timeline depends on how fast you can supply the basics — typically ID, a council rates notice and a current mortgage statement — and whether a valuation is needed.
Who does a caveat loan suit — and who should avoid it?
It suits a company or trust with real equity in property, a hard deadline, and a credible way out — a sale, a refinance, or income about to land. Saying who it doesn’t suit matters just as much: it isn’t for anyone without a clear exit, because a short-term, equity-based loan with no repayment plan is a problem deferred, not solved. It’s also not for consumer or personal-purpose borrowing against the family home — that’s a different regulatory regime entirely. And where there simply isn’t enough equity, a caveat won’t reach far enough to help.
Caveat loan vs second mortgage — what’s the difference?
Both raise capital against property you already own, and both sit behind your first mortgage. A caveat loan is the faster, lighter, shorter option; a second mortgage is a registered security that suits larger or slightly longer needs and sometimes needs your first-mortgage holder’s consent. If you’re weighing the two, caveat loan vs second mortgage goes deeper.
A note on regulation: business-purpose lending to a company or trust generally falls outside the National Credit Code — the consumer-credit regime that governs home loans — which is part of why the assessment is lighter and the timeline shorter. It’s a business decision for a business borrower, and it should be made with your accountant’s input.
Lienhouse structures caveat loans for Australian companies and trusts and arranges the funding, secured against property — you deal with us start to finish.
FAQ
Is a caveat loan the same as a mortgage?
No. A caveat is a lighter security than a registered mortgage — it's a notice on the title rather than a registered loan over the property — so it's faster to put in place and sits behind your existing first mortgage without disturbing it.
Do I have to refinance my existing loan?
No. A caveat loan sits behind your current mortgage, which stays exactly where it is. You're borrowing against your equity without touching a good first-rate facility.
Can I get a caveat loan with poor credit?
Often yes. These are assessed mainly on the equity in your property and a credible exit, not your credit score — though everything is subject to assessment.
Is a caveat loan regulated?
Business-purpose lending to a company or trust generally falls outside the National Credit Code — the consumer-credit regime that governs home loans. It's a business decision, and worth making with your accountant's input.
What happens at the end of the term?
The loan is repaid — usually from a property sale, a refinance, or business income — and the caveat is removed from your title. A clear exit before you start is essential.