Australia · 2026-27 · checked 18 October 2026
A $45,000 business car on a chattel mortgage over five years comes to $914 a month, with $9,863 of interest, at the calculator's starting rate of 8.09%. What it costs the business after the GST credit and the tax deduction is a different and smaller number. The calculator shows both.
Put in the price, how it is paid for and whether the business is registered for GST. You get the repayment, the GST credit, the tax deduction and the first year in cash, with the working shown.
What you enter stays in your browser. The rate starts at 8.09%, a starting figure and not a quote: put in the rate from your lender. These are estimates, not tax advice.
A chattel mortgage is a loan to buy a business car or equipment, with the item as the lender's security. The business owns the item from the first day, so it can claim the GST on the price, deduct the item under the depreciation rules, and deduct the interest.
Those three things are why the repayment is not the cost. They also change the owner's income, and that moves Family Tax Benefit and child support.
The loan is for the price, GST included, less any deposit. Interest is charged monthly on what is still owed. A balloon is a lump sum left to pay at the end, which lowers every regular repayment and raises the interest. Here is a $45,000 car, no deposit, five years, 8.09%, with and without a balloon of $9,000 (20% of the price). We ran the calculator on 18 October 2026.
| No balloon | $9,000 balloon | |
|---|---|---|
| Repayment a month, for 60 months | $914 | $792 |
| Owed at the end | $0 | $9,000 |
| Interest in all | $9,863 | $11,531 |
| Price plus interest ($45,000 + interest) | $54,863 | $56,531 |
The balloon makes each month $122 easier and the loan $1,668 dearer. It is a way to move cost to the end, not to remove it.
If you only want the repayment, our business loan (chattel mortgage) calculator does that, and also shows extra repayments, comparing two loans and the real rate. It counts interest daily, as lenders do, so its totals differ from the table above by a few dollars.
A business registered for GST claims back the GST in the price of a car or equipment it uses in the business. It does so in a later activity statement, at the business-use share. On $45,000 that is one-eleventh: $4,091. The credit is not taken off the loan, so the business carries it for a while. We assume it arrives three months in. Some lenders finance the price without the GST, and your quote will say.
A car has a limit. If a passenger car costs more than the car limit, $69,883 in 2026-27, the most GST credit is $6,353, whatever you paid. A ute or van that carries a tonne or more is not a passenger car in this sense.
Three deductions can sit behind a chattel mortgage: the item, the interest and, in later years, the pool. For the same $45,000 car, 100% for business, owned by a sole trader with $100,000 of profit and starting use on 1 November 2026:
| The item: $40,909 without GST. It costs $20,000 or more, so it goes into the small business pool at 15% in the first year | $6,136 |
| Plus the interest in the first 12 months, deducted in the year it is paid | $3,363 |
| Deducted from this year's profit | $9,499 |
| Income tax and Medicare levy saved: 32 cents for each dollar | $3,040 |
| Family Tax Benefit, couple with no second income and two children aged 6 and 3: 20 cents for each dollar | $1,900 |
The other $34,773 of the item's cost stays in the pool and is deducted in later years, at 30% a year or all at once when the pool is under $20,000 at the end of a year. The calculator does not count those later deductions in its totals, because they depend on every other item in your pool.
A cheaper item changes the picture. Under $20,000 without GST, the whole business share is deducted in the first year. See the instant asset write-off calculator.
What the business pays out in the first 12 months, less what comes back. A minus sign is money back.
| No balloon | $9,000 balloon | |
|---|---|---|
| Repayments in the first 12 months | $10,973 | $9,506 |
| GST claimed back | −$4,091 | −$4,091 |
| Tax saved (income tax and Medicare levy) | −$3,040 | −$3,057 |
| Family Tax Benefit change | −$1,900 | −$1,911 |
| Out of pocket in the first year | $1,942 | $447 |
| A month, on average | $162 | $37 |
| The same loan to a person buying the car personally, with no deduction and no GST credit | $10,973 | $9,506 |
The tax and payments don't arrive in a month. The GST comes with an activity statement, the tax with the tax return, and Family Tax Benefit as Services Australia balances it. A higher balloon makes the first year look better and the end of the loan worse.
For income tax, the ATO treats the hirer under certain hire purchase agreements as the buyer and owner, so the item and the interest are deducted in a similar way. A finance lease can be treated as a lease or as a sale and a loan, and which one depends on the terms. Our calculator covers a chattel mortgage or business loan, and does not cover a finance lease.
A sole trader can't have a novated lease, because it needs an employer. If you are an employee, see how a novated lease affects family payments.
A loan to buy a business car or equipment, with the item as the lender's security. The business owns the item from the day it buys it, and the lender holds a mortgage over it until the loan is paid off.
If the business is registered for GST, it can claim the GST in the price of a car or equipment it uses in the business, at the business-use share. The loan is for the price, so the credit comes back later with an activity statement and is not taken off the loan. On a car over the car limit of $69,883 the most credit is $6,353.
Interest is generally deductible to the extent the borrowed money is used to earn income. The ATO looks at what the money was used for. For an item used 80% for business, about 80% of the interest is deductible. Interest paid in an income year is claimed in that year.
A lump sum left to pay at the end of the loan. It lowers each regular repayment, and it raises the interest, because you owe more for longer. On a $45,000 car over five years, a $9,000 balloon (20% of the price) lowered the repayment from $914 to $792 a month and raised the interest from $9,863 to $11,531, at 8.09%.
No. A novated lease needs an employer, and a sole trader doesn't have one. The sole trader's options are cash or finance such as a chattel mortgage, and the item is deducted through the business.
It depends on the price, the rate, the term, the deposit and any balloon. On a $45,000 car with no deposit and no balloon, at the calculator's starting rate of 8.09% over five years, the repayment is $914 a month. 8.09% is the Reserve Bank's average for new fixed-rate small business loans in August 2026: a starting figure, not a quote. Use the rate from your lender's quote.
The deductions are for the item and the interest. The item's cost is written off or pooled under the small business depreciation rules, and the interest is deductible at the business-use share. The repayments themselves are not a deduction. In our run the first year's deductions on a $45,000 car were $9,499, which saved $3,040 in tax.
ATO pages read on 18 October 2026, with the date each page says it was last updated.
For brokers: Put the repayment, the GST credit and the tax deduction on your own website, in your colours, so a client sees the whole cost of a chattel mortgage. See how brokers use these calculators →
General information about chattel mortgages and the business tax rules for 2026-27 as at 18 October 2026, not personal advice, tax advice or credit advice. The figures are examples until you put in your own. Talk to your accountant and your lender.