Glossary

Caveat

What a caveat is, how a caveat loan differs from a registered mortgage, and what lodging one over a property actually does.

A caveat is a notice lodged on a property's title that prevents further dealings with that title, such as a sale or refinance, without the caveator being notified — a statutory warning rather than a registered security interest in its own right. In lending, a caveat gives a lender a practical claim over a property pending repayment, typically used where speed matters more than the stronger, longer-term protection a registered mortgage provides. For a borrower, this distinction matters mainly in how fast the facility can be arranged: a caveat can usually be lodged without an existing mortgagee's consent, which is why caveat loans move faster than facilities requiring a registered second mortgage. Lenders treat a caveat as adequate security for short-term, well-exited facilities, but generally prefer a registered mortgage for anything running beyond a matter of months.

Related

Caveat loans · Second mortgage · PPSR

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