Caveat loans behind your existing mortgage: consent, second caveats and when to refinance instead

Almost every owner who rings us about a caveat loan already has a mortgage. That’s normal. A caveat loan exists precisely so you can borrow against the equity in a property without pulling apart the bank loan that’s already on it. The questions worth answering are the practical ones: does the bank need to agree, will it notice, what if another private lender is already on the title, and when is it smarter to start again with one new first mortgage?

Can you get a caveat loan if your property already has a mortgage?

Yes. Your bank holds a registered first mortgage. Our loan sits behind it, secured by a loan agreement and a caveat lodged on the title. Nothing is refinanced, the bank’s balance doesn’t change and your monthly bank repayments carry on as before.

What we lend against is the gap between the property’s value today and everything already owing on it. Our how equity is calculated page walks through that sum, and the LVR calculator lets you test your own numbers.

Where the property is matters:

Property location	What we register behind the bank	How it’s recorded
Victoria	Caveat, backed by a signed loan agreement	Lodged electronically with Land Services Victoria
Any other state or territory	Short-term registered second mortgage	Registered at that state’s land registry

Land Services Victoria is the same registry many people still know as Land Use Victoria. The name changed on 21 May 2026, and the registry says services for customers haven’t changed. Its glossary describes a caveat as a document that anyone with a legal interest in a property can lodge with it, and that’s exactly what our caveat records.

Do you need your bank’s consent for a caveat loan?

Sometimes. There’s no single answer because it comes down to the wording of your mortgage and loan contract, not to the caveat itself.

Mortgage terms generally fall into three camps:

• Silent. Nothing restricts further security, so the caveat loan can proceed without asking.
• Notice required. You must tell the bank, but it can’t stop you.
• Consent required. The bank’s written agreement is needed before you give anyone else security over the property.

Commercial and business facilities tend to be stricter than ordinary home loans, and some include cross-default clauses linked to further borrowing. To find out where you stand, open the general terms booklet that came with your loan and search for “further security”, “encumbrance”, “second mortgage” or “caveat”. A conveyancer can read it in a few minutes.

If consent is needed, ask early and keep it simple: the amount, the purpose, the term and how it will be repaid. Banks don’t all move at the same speed, so that request is often the longest item on the timeline. Tell us what your terms say when you enquire and we’ll plan around it.

Will your bank find out about a caveat or second mortgage?

Plan as though it will. A Victorian register search statement lists the current owners, a land description and every encumbrance on the title, including mortgages and caveats. Any bank that searches your title, whether at a refinance, a facility review or when you sell, will see our caveat sitting there. A registered second mortgage interstate is equally visible.

That visibility is a reason to check your terms rather than a reason to worry. Owners who’ve read their mortgage first and handled any notice or consent properly never have an awkward conversation later.

Ready to see what your equity behind the bank could support? Start your enquiry here and tell us what’s owing.

Can you get a second caveat behind an existing caveat?

A “second caveat” usually means the title already shows a bank mortgage and a caveat from another private lender, and you need more money. There are three ways it goes.

1. We lend behind both. This is possible where there’s plenty of equity left. We need the earlier lender’s payout figure and an understanding of what its caveat secures. Ranking between two caveats is less tidy than between two registered mortgages, so we usually want a written agreement on who gets paid first.
2. We pay the earlier lender out. Often the cleaner choice: one caveat, one lender, one exit date, and usually less cost overall. Our caveat loan refinance page covers how that switch works.
3. The existing caveat isn’t a lender’s. Buyers under a contract, builders, relatives and former partners sometimes lodge caveats. We need to know what it claims before we lend, and some have to be withdrawn first.

Outside Victoria the same logic applies to a third registered mortgage. In practice, refinancing the existing second mortgage into one new loan is usually the tidier answer.

When is a first mortgage refinance the better move?

Sitting behind the bank is quickest when the bank loan is healthy and you only need a slice of equity for a while. A short-term first mortgage that pays the bank out is often stronger when:

• the bank debt is small compared with what you need, so one loan is simpler than two;
• the bank loan is maturing, in arrears or being called up anyway;
• your bank has refused consent to further security;
• the title already carries several lenders and needs tidying into one;
• you need a larger total amount than equity behind the bank allows.

The trade-off is time. A refinance needs the bank’s payout figure and its discharge at settlement, which adds days. Fixed-rate home loans can also carry break costs, so ask your bank for that number before you decide.

An illustrative example: tidying a second caveat

Illustrative only. Round numbers, no real people.

A landscape supplies business owner in Melbourne’s east owns a house worth about $1.3 million. Her bank is owed $560,000, and a private lender holds a caveat for $90,000 from an earlier stock purchase. She now needs $120,000 to secure a bulk paver order before a price rise.

Rather than adding a third interest to the title, we write one caveat loan of $210,000. It pays out the earlier lender’s $90,000 and releases $120,000 for the order. Combined lending against the house is about $770,000 plus costs, or roughly 59 per cent of the value. Her home loan terms required notice only, which she gave in writing. The earlier caveat is withdrawn and ours lodged in the same electronic settlement. The exit is a refinance of the whole short-term amount into her bank facility once the year’s accounts are lodged.

Behind the bank and short on time? Let’s check your title

You don’t have to unpick a perfectly good home loan to get business money moving. Tell us what’s on the title, what’s owing and when you need the funds, and we’ll tell you whether a caveat, a second mortgage or a first mortgage is the quickest route.

The enquiry form takes about 60 seconds and there’s no credit check when you first enquire. Your details stay with us rather than being pushed out to a stack of lenders, and a real person from our team rings you to talk it through. Please answer accurately, especially the property address and state, any existing caveats and your real deadline.

Check what sits behind your bank →