First mortgage private loans, priced on the security and the exit.
The senior position on title, and the cheapest money we write. Four of our five products sit here. First mortgage lending, Australia-wide.
- Facility
- $100K - $10M
- Max LVR
- 75%
- From
- 8.50% p.a.
- Consent
- None needed
Nothing ranks ahead of us.
A private first mortgage is the simplest thing we write: your client gives us a first registered mortgage over the security, and nothing sits on title behind it. Any existing loan is paid out at settlement, so there is no incumbent to get consent from and nothing ranking ahead of us.
That is why it prices better and settles faster than anything behind it. Private lending for brokers, on commercial security, priced per deal.
Also called first registered mortgage, first ranking mortgage, first priority mortgage, first position mortgage, first legal mortgage, stand alone first mortgage, first mortgage security - all the same position.
First against second
Same property. Different place in the queue.
First mortgage vs second mortgage, in private lending: same property, same valuation, different place in the queue - and that is the whole of the price difference.
First mortgage
Repaid first
The senior loan on title. Paid out in full before anything behind it, so it carries the least risk and the lowest rate. No other mortgagee's consent to obtain.
Second mortgage
Repaid after the first
Registered behind an existing first on the same title, and repaid only once that first is satisfied. Priced for the wait, and it needs the first mortgagee's consent to a second mortgage.
How credit structures it
What decides how a first mortgage prices.
One valuation, one number
LVR is our facility against the panel valuation of the first mortgage security. Nothing else is registered, so there is no combined position to work back from and no incumbent balance to verify.
The exit does the work
Sale, refinance or a dated capital event. We are not testing whether your client can service it - the assessment is flexible on income and hard on the exit, and we are testing whether that exit is real and lands inside the term.
Product follows the file
A clean file prices on Alphacon Bridge, our first mortgage bridge loan and the only one with no risk fee. A deadline goes to Alphacon Fast, which is the fastest first mortgage we write. Staged drawdowns go to Alphacon Line, and anything regional or structurally unusual to Alphacon Reach.
First mortgage parameters and rates
- Facility
- $100K - $10M
- Term
- 3 - 60 months
- Max LVR
- 75%, or 70% on Alphacon Reach
- Position
- First registered mortgage
- Title
- Unencumbered, or discharged at settlement
- Servicing
- Not assessed
A first mortgage is the cheapest position we write, because nothing ranks ahead of us on a recovery. Private first mortgage rates follow the LVR, the security and the strength of the exit, so they are quoted per deal rather than off a board rate - priced against the asset, where a bank loan is priced against the borrower. Alphacon Bridge is the sharpest of the four, on a clean file.
Indicative. Subject to credit assessment, a panel valuation and satisfactory security.
Send this
- Security address, and the contract of sale where there is one
- Estimated market value, and any valuation done in the last six months
- Loan amount and the term you want
- Payout figure for any existing mortgage being discharged
- The exit: what repays us, and when
What kills it
A caveat nobody mentioned
Caveats, writs and unregistered interests all have to come off before settlement. Order the title search at submission rather than after credit approval - it is the most common reason a clean first mortgage runs late.
A valuation that will not support the number
We lend against a panel valuation, not the contract price or an appraisal. Where the two are far apart, say so early and we will size the facility to the valuation instead of repricing the deal at the last minute.
A borrower who is not a company or trust
We write a first mortgage loan for a company or trust borrower, for a business purpose, and nothing else. An individual borrower cannot be fixed later in the file - the structure has to be right before the letter of offer.
What we assess
First mortgage lending criteria, in four lines.
- Security
- Commercial, industrial, retail or investment property, Australia-wide. Metro on Alphacon Bridge, Alphacon Fast and Alphacon Line; every postcode via Alphacon Reach.
- Max LVR
- To 75% on Alphacon Bridge, Alphacon Fast and Alphacon Line. To 70% on Alphacon Reach, against the property alone.
- Income
- Self-declared or prepaid. Low doc and self-employed borrowers are assessed on the security, not the tax return. Alphacon Bridge asks for an accountant's letter instead, in exchange for its lower rate.
- Clear title
- Unencumbered, or discharged at settlement so ours is the only mortgage registered.
Illustrative
A worked deal.
- Property value
- $2,000,000
- Existing loan
- Nil
- First mortgage
- $1,500,000
- LVR
- 75%
- Term
- 12 months
- Mortgages on title
- One - ours
Nothing else on title, priced at our lowest risk tier, interest serviced until refinance or sale.
Have one in front of you?
Send the security, the number, the dates and the exit. You will have an indicative position the same business day.
Broker questions
First mortgages, answered.
What is a first mortgage?
The loan registered first against a property's title, ahead of every other mortgage over the same asset. If the security is ever realised, the first mortgagee is repaid in full before anything behind it sees a dollar. On our files it is a first mortgage loan secured by real estate held by a company or trust, for a business purpose.
Why does a first mortgage price better than a second?
Because nothing ranks ahead of it. If the security is ever realised, the first mortgagee is paid in full before anyone else sees anything - so the risk we are pricing is lower, and the rate follows. On the same asset, a first mortgage will always be the cheaper of the two.
Does my client need consent from their existing lender?
No. The existing loan is paid out and discharged at settlement, so ours becomes the only mortgage on title. That is exactly why a first mortgage settles faster than a second - there is no incumbent whose consent you are waiting on.
What LVR will you go to?
Up to 75% of a supportable panel valuation on Alphacon Bridge, Alphacon Fast and Alphacon Line, and 70% on Alphacon Reach. It is a single-property calculation: our facility over the valuation, with nothing else to add in.
Does my client's credit score matter?
On Alphacon Fast, Alphacon Line, Alphacon Reach and Alphacon Second it is not scored at all - the assessment sits on the security and the exit. Alphacon Bridge asks for credit above 600, and in exchange it is the cheapest thing we write and carries no risk fee.
How quickly can a first mortgage settle?
Indicative terms the same business day, and settlement is usually driven by the valuation and the legals rather than by us. A clean file over metro security has settled in as little as five days.
What security do you take a first mortgage over?
Commercial, industrial, retail or investment property held by a company or trust - a first mortgage commercial loan, in other words. Metro coverage across Alphacon Bridge, Alphacon Fast and Alphacon Line; regional and rural security goes to Alphacon Reach, which considers every Australian postcode.
What is a first ranking mortgage, and is it different from a first registered or first legal mortgage?
No - one position, several names. First ranking, first registered, first priority, first position and first legal mortgage all mean the same thing: the senior loan on title, repaid before anything registered after it. Your client may arrive using any of them, and none of them changes the deal.
Can a first mortgage be used for working capital, not just a purchase?
Yes. The position says where we sit on title, not what the money is for. Purchase, refinance, working capital, a settlement gap - all fine, provided the purpose is genuinely commercial and the borrower is a company or trust.
Which product should I put a first mortgage on?
Alphacon Bridge if the file is clean, because it carries no risk fee and is the cheapest thing we write. Alphacon Fast if the date is the problem. Alphacon Line if the money goes out in stages. Alphacon Reach if the security is regional or the structure is unusual. Send the scenario and we will tell you which it prices on.
What are your first mortgage lending criteria?
A company or trust borrower, a business purpose, and commercial, industrial, retail or investment security held in that structure. To 75% of a panel valuation, 70% on Alphacon Reach. Title unencumbered or discharged at settlement, and a dated exit inside the term. Run the number through the LVR calculator before you send it.
Can a first mortgage be used for a bridge or a short term loan?
Yes, and most of ours are. A short term first mortgage is the bulk of what we write - first position commercial mortgage bridge loans, three months at the shortest and sixty at the longest. The position says where we sit on title; the term follows the exit. How one is sized is set out on commercial bridging finance.
How is a private first mortgage loan different from a bank loan?
The test. Private first mortgage lenders underwrite the exit; a bank underwrites the borrower and wants two years of financials, where we do not assess servicing at all. That is days rather than months, and no incumbent lender's consent to wait on, because the existing loan is discharged at settlement. The trade is a higher rate for a shorter term.
Your deal deserves a decision-maker.
Security, the number, the dates and the exit - that is the whole submission. A light touch to send it, no call centres, a straight answer the same day.