Direct answer
A private first mortgage is a first-ranking loan secured over property, arranged through a private lender, non-bank lender or specialist fund rather than a mainstream bank, used when speed, structure, credit history or documentation call for an alternative approach. In Australia it typically runs three months to three years, funds in five to fifteen business days, and can be sized from $250,000 through to $50m and beyond.
Who uses it and why
A private first mortgage is reached for when a borrower's circumstances sit outside what a bank's credit policy is built to accommodate, even though the underlying security and transaction are sound. A self-employed borrower with strong cash flow but complex tax structuring cannot produce the clean serviceability evidence a bank wants. A property owner with a discharged judgment on their credit file, resolved years ago but still visible, finds every bank application stalls at the same point. A purchaser needs to settle inside a timeframe no bank could realistically match, or the asset itself — a specialised commercial property, or land without an existing improvement — sits outside a bank's typical risk appetite.
In each case the fundamentals can still be strong: real equity, a clear purpose, and a credible plan for repayment. What differs is the lens through which the file is assessed. A private first mortgage lender looks at the whole picture — the asset, the story, the exit — rather than running the application through a standardised bank scorecard, and can move faster because of it. Typical borrowers include property investors and developers, self-employed and complex-structure borrowers, and applicants whose credit history includes a default or judgment that a bank's policy would otherwise exclude outright.
Many of these borrowers are not opposed to bank finance in principle — several are former or future bank clients — but need a facility now that a bank's process cannot deliver on the required timetable, or need this particular file assessed on its merits rather than against a standardised policy line. A private first mortgage is frequently the bridge between where a borrower's circumstances sit today and where their file will support a mainstream bank facility again.
What lenders look at
Security sits at the centre of every private first mortgage: the asset type, its location, marketability and condition, and how conservatively the lender needs to lend against it. Loan-to-value ratios typically run up to 65–75%, informed by asset quality as much as by the strength of the borrower's file. Security can include residential or commercial property and, in some cases, land on its own.
Because banks are the natural benchmark for this product, it is worth being specific about how the panel differs. A bank will generally still be considered where the borrower's file is otherwise clean and time allows, since banks remain part of the lender panel for every facility Solara arranges. Where a bank isn't the right fit, private lenders and specialist funds assess the file on the asset, the purpose, and the exit rather than a fixed policy, and are typically able to work from alt-doc or low-doc evidence — BAS, bank statements, an accountant's letter — rather than insisting on a full-doc picture.
Purpose and exit both matter: a purchase, a refinance, an equity release, or an investment acquisition each carry a different risk profile, and lenders will want a clear sense of how and when the facility is expected to be repaid or refinanced, particularly at the shorter end of the term range. Credit history is read with genuine flexibility here — this product's tolerance extends to defaults and judgments recorded on a borrower's file, assessed in the context of when they occurred and what has changed since, rather than as an automatic disqualifier.
Typical terms
|
|
| Size |
$250,000 to $50m+, subject to lender assessment |
| LVR |
Typically up to 65–75% |
| Term |
Three months to three years |
| Speed |
Indicative funding in 5–15 business days from a complete application |
| Security |
First mortgage over residential or commercial property, or land |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Non-conforming first mortgage. Written for a borrower whose file would otherwise fit a bank product but for one factor — a default, a complex entity structure, or documentation that doesn't match a bank's checklist — assessed instead on the strength of the security and the story.
Purchase or acquisition mortgage. Funds the purchase of an investment or commercial property on a timetable a bank cannot match, or where the asset itself sits outside a bank's standard appetite.
Refinance from a bank or existing facility. Moves a borrower off an expiring or unsuitable facility, often used where a bank has called a loan or declined to renew it and the borrower needs continuity while a longer-term solution is arranged.
Equity release first mortgage. Used where the property is unencumbered and the borrower wants to draw a first-ranking facility directly against it, rather than through a second mortgage behind an existing loan.
Land or specialised asset mortgage. Structured around an asset class — vacant land, a specialised commercial property, or a site without an existing improvement — that a mainstream bank would generally decline outright.
Costs and how we're paid
Pricing on private first mortgages reflects the asset, the loan-to-value ratio, the term and the borrower's documentation level, and is quoted on enquiry once a lender has reviewed the file — there is no flat rate that applies across the product. Facilities may carry an establishment fee and ongoing line fees; all costs are set out in the loan offer before a borrower commits.
Solara is remunerated by the lender, the borrower, or both, depending on structure, which may include a commission from the lender and/or a broker fee agreed with the borrower. Any commission or fee is disclosed in writing before an application proceeds.
Process and timing
- Initial scoping call — typically same day. We confirm the security, the purpose, the borrower's documentation position and the timeframe.
- Document collection — typically 1–3 business days. Title and security information, entity documents, and evidence appropriate to the doc level, from full financials through to BAS, bank statements or an accountant's letter.
- Lender matching and submission — typically 1–2 business days. We place the file with the banks, private lenders and specialist funds whose appetite best matches the asset, the borrower's file and the timeframe.
- Approval and offer — typically 2–7 business days, faster with private lenders and specialist funds than with banks.
- Documentation and settlement — typically 2–5 business days once terms are accepted and the mortgage is registered.
Frequently asked
What is a private first mortgage?
It is a first-ranking loan secured over property, arranged through a private lender, non-bank lender or specialist fund rather than a mainstream bank, used when speed, structure, credit history or documentation call for an alternative to a standard bank product.
Why would I use a private lender instead of a bank?
Common reasons include a timeframe a bank cannot meet, a credit file with a default or judgment that falls outside bank policy, a complex entity or income structure, or an asset type a bank's risk appetite does not accommodate. The underlying transaction is often sound; it is the fit against a bank's fixed policy that differs.
Can I get a private first mortgage with a default or judgment on my file?
Often, yes. This product's credit tolerance extends to defaults and judgments, assessed in context rather than as an automatic exclusion, provided the security and purpose support the application.
Is a private first mortgage more expensive than a bank loan?
Pricing reflects the risk, speed and flexibility involved and is generally higher than an equivalent bank facility, though it is set on the specific file rather than a published rate. An indicative range is provided on enquiry once the file has been assessed.
How fast can a private first mortgage be funded?
Indicative funding runs from around five to fifteen business days from a complete application, considerably faster than most bank timeframes, particularly where documentation is alt-doc or low-doc.
What can a private first mortgage be used for?
Common purposes include a property purchase, a refinance, an equity release, or funding an investment acquisition. It must be for business or investment purpose — consumer use falls outside what Solara arranges.
Do I need full financials to qualify?
Not necessarily. While full-doc evidence is accepted and can support better pricing, alt-doc and low-doc structures are available for self-employed and complex-structure borrowers, assessed on the strength of the security and the story rather than a fixed documentation checklist.
Is a private first mortgage a long-term solution?
It can be, though many borrowers use it as a stepping stone — clearing the issue that excluded them from bank finance, then refinancing to a mainstream lender once their position has normalised.
Related products
Commercial property loans — the better fit for a straightforward income-producing commercial property purchase or refinance where a longer term and bank-style pricing are the priority.
Second mortgages — worth considering directly when an existing first mortgage is being kept in place and the requirement is releasing additional equity behind it.
Bridging loans — the closer match where the need is specifically timing-driven, such as settling before an existing property sells, rather than a standing first-mortgage solution.