Chattel mortgage
Chattel mortgage is a loan arrangement where you buy movable property (the chattel) with the lender’s money and give the lender a security interest in that property. Ownership usually passes to you at purchase, but the lender can claim the chattel if you don’t repay. Once you repay the loan, the mortgage ends and ownership returns to you (the equity of redemption). The exact details vary by country.
- Australia: Businesses use chattel mortgages to buy cars, trucks and other equipment. If you account for GST on a cash basis, you can claim an input tax credit for the GST in your next BAS. Stamp duty may apply when you repay.
- England and Wales: A chattel mortgage is a form of security. Individuals can mortgage personal property if done under the Bills of Sale Acts; companies can mortgage movable property and this is usually a registrable charge under the Companies Act 2006.
- Key point for a legal mortgage: the lender must have the legal title to the chattel and there must be an agreement that the title will be returned to the borrower when the loan is repaid. If these requirements aren’t met, it may be treated as an equitable mortgage or another type of charge. Some assets like ships and aircraft have special rules.
- United States: Known as secured transactions, governed mainly by Article 9 of the Uniform Commercial Code. Early laws required filings and witnesses to protect the security interest; different historical approaches also emerged in other legal traditions.
This page was last edited on 3 February 2026, at 08:00 (CET).