Second Mortgage Lenders: Compare Providers and Terms

Second mortgage lenders are best compared on the same client scenario, with security conditions and usable funds weighed alongside the total repayment cost. Funding suits a broker wanting an established direct channel and documented consent requirements. Knote is a candidate for an eligible business-purpose loan where its buffered exposure calculation and short term fit.

Neither is a universal winner. A lower establishment fee can be outweighed by interest, deductions from the advance or the cost of leaving early.

Compare Second Mortgage Lenders on One Scenario

Funding and Knote both have second-ranking products that can be considered for the fictional scenario below, as at October 2026. These are candidates for assessment, not approved offers.

A broker has already established the business purpose and proposed second-ranking structure for Alex, a self-employed company director. Alex needs funds for an agreed business equipment purchase. This comparison starts after that assessment, which the business-purpose second mortgage guide covers.

Scenario fact	Same input for both providers
Borrower	Alex, an Australian resident and self-employed company director
Purpose	Business equipment purchase, already assessed as a business-purpose transaction
Security	An established residential house in metropolitan Melbourne
Valuation assumption	$1,500,000 current market value, subject to the provider’s accepted valuation
Existing first mortgage	$700,000 outstanding with a different lender, no arrears
Proposed security	Registered second mortgage over that house
New facility	$200,000 gross advance, with deductions compared separately
Term	Six months
Exit	Signed sale contract on a separate unencumbered property; $350,000 net proceeds, settlement in month four
Timing and fallback	Funds required in 20 business days; Alex can defer the equipment purchase if conditions remain unresolved
Income and credit	Current business financials available, with no adverse credit declared

Funding’s current product guide supports second mortgages and direct broker access. It is the stronger initial choice when those channel and consent arrangements suit the file. Knote’s second mortgage product is worth comparing when its business-purpose eligibility and buffered exposure method fit.

The same $200,000 gross facility must stay in each row. Increasing one provider’s advance to cover deductions changes the comparison and needs a separate assessment.

Verify the Provider and Broker Access

The provider’s brand, the contract lender and the team administering the loan can be different entities. Record each role separately so the broker knows who can answer a policy question and who receives repayments.

Funding’s entity disclosures, as at October 2026, identify Funding Commercial Pty Ltd as a business/commercial lending entity. Its Australian Company Number (ACN) is 634 414 127. ABN Lookup confirms that company identity.

Funding.com.au Pty Ltd is the public-facing group entity. Funding’s consumer lender is Funding Pty Ltd, with Australian credit licence 483665. Its credit guide expressly excludes business-related loans, so that guide cannot identify the contract lender for Alex’s transaction by itself.

Knote’s privacy policy, as at October 2026, identifies Knote Group Aus Pty Ltd, ACN 657 400 041. The stated credit representative relationship is with Jass Group (Aus) Pty Ltd, under credit representative number 544373. ABN Lookup confirms the Knote company identity.

Knote’s privacy policy also describes wholesale funding and third-party servicing arrangements. The specific contract lender and servicer for Alex’s offer therefore remain transaction-specific. A credit representative number identifies an authorisation relationship, not the entity advancing every loan.

Access or responsibility	Funding	Knote
Supported contact route	Accredited broker portal or direct broker team	Direct provider enquiry through its second mortgage page or 1300 056 683
Aggregator requirement	Product guide says panel membership is not mandatory and direct broker access is available	Specific aggregator or broker accreditation requirements require direct confirmation
Application and policy response	Funding’s broker team and credit team	Knote enquiry team, with the assigned assessor identified for the transaction
Contract lender	Business entity disclosed as Funding Commercial Pty Ltd; match the offer’s named lender	Named in the transaction offer; do not substitute the brand or representative entity
Servicing contact	Funding’s loan-services contact is on the consent form; contractual servicing entity must match the offer	Servicing entity and payment contact must be identified in the offer

Funding’s broker page provides the accreditation and scenario contact route. Knote’s second mortgage page provides a direct enquiry route. A second mortgage broker can use those destinations without assuming an aggregator relationship or an authenticated portal exists.

Compare Ranking, Consent and Security Conditions

Both candidates accept second-ranking security, but their exposure methods are different. Funding’s product guide, as at October 2026, lists residential and commercial property with exposure up to 70% loan-to-value ratio (LVR). A published maximum does not establish the approved limit for Alex.

Funding’s second mortgage consent request requires first-mortgagee consent. It also calls for a deed of priority where necessary and written confirmation of the first lender’s priority amount. The form names Funding Pty Ltd or its nominee, which needs reconciliation with the business offer’s actual mortgagee.

Knote’s product page, as at October 2026, uses a structured loan-to-value ratio (SLVR). Its stated residential maximum is 90%, with a buffer of 10% to 25% on first-mortgage debt depending on the first provider’s priority. That metric cannot be compared directly with Funding’s ordinary LVR limit.

For Alex, Knote’s illustrative buffer would treat the $700,000 first debt as $770,000 to $875,000. Adding the proposed $200,000 gives buffered exposure of $970,000 to $1,075,000, before any other amounts Knote includes. These are illustrations of its method, not its final calculation or approval.

Security issue	Funding	Knote
Proposed residential house	Within the published property category, subject to assessment	Within the published property category, subject to assessment
Exposure basis	Published LVR ceiling, with accepted valuation and priority exposure determined for the offer	SLVR with first-mortgage buffer and transaction-specific priority treatment
Valuation	Required; desktop or kerbside can sometimes be accepted	Desktop or full valuation according to security and loan size
First-mortgagee requirements	Consent, priority deed where necessary and written priority amount	First-mortgagee priority is material; exact consent and deed requirements need transaction confirmation
Remaining condition	Accepted value, priority amount and nominated mortgagee	Accepted value, buffer, priority documents and legal mortgagee

A second mortgage with a different lender needs an offer that works behind the actual first lender. If the structure itself remains uncertain, use the second mortgage guide before choosing a provider.

Compare Cost, Term and Evidence

Compare both offers over the same six months, using the $200,000 gross advance and the same exit date. Amounts below are Australian dollars. Goods and services tax (GST) treatment must be stated for each quoted fee.

Funding’s product guide and Knote’s product page supply the following terms as at October 2026. The fee figures are starting or indicative figures, not quotes for Alex. An unknown amount stays outside the total until the written offer supplies it.

Cost or condition	Funding	Knote
Interest rate and charging method	Scenario rate requires a quote; guide describes interest deducted at settlement	Rate, annual or monthly basis and payment method require a quote
Establishment fee	From 2.5%, minimum $2,500; $5,000 at 2.5% on this facility	Approximately 1.5%; $3,000 at 1.5% on this facility
Legal fees	From $1,500 plus GST and outlays	Borrower pays fixed legal fees plus disbursements; amount unknown until quoted
Valuation	At cost	Desktop or full valuation; amount unknown until quoted
Commitment or management costs	Commitment fee covers valuation and upfront searches; identify any overlap with separately charged costs	Monthly account keeping applies; amount unknown until quoted
Default and enforcement costs	Unknown until contract terms are supplied	Unknown until contract terms are supplied
Early repayment and discharge	Unknown until contract terms are supplied	Unknown until contract terms are supplied
Published term range	Up to 36 months; six months remains subject to the offer	Up to 12 months; six months remains subject to the offer
Income and credit evidence	Guide lists accountant declaration or returns for self-employed borrowers; final credit requirements depend on assessment	Impaired credit can be considered; exact income evidence and credit conditions depend on assessment
Exit	Verifiable sale or refinance exit required	Proposed exit is assessed as part of the transaction
Net funds	$200,000 less quoted settlement deductions, including any prepaid interest	$200,000 less quoted settlement deductions

The establishment-fee difference is $2,000 at those illustrative percentages. It cannot establish that Knote is cheaper overall. Interest and the other charges can change the result.

For a quote comparison, calculate net funds as the gross advance less each settlement deduction. Calculate total borrowing cost from all interest and fees through discharge. Keep principal repayment separate so it isn’t mistaken for a fee.

If an offer uses annual simple interest, compare the actual days charged and its day-count basis. If it uses monthly interest, compare the charged months and any minimum interest period. Also show the cost of repayment in month four, when Alex expects the sale, alongside the six-month contractual term.

Neither lender’s published fee summary gives Alex a complete net-funds or total-cost figure. Direct confirmation of the quote-specific amounts is required before either offer can win on cost. If Alex requires $200,000 net, both gross advances must be recalculated on that same requirement.

Choose by Exit and Remaining Conditions

For Alex’s six-month business-purpose scenario, Funding is the initial choice when direct broker access and a documented consent route decide the selection. Its current guide, as at October 2026, accommodates that term and security category. Select it only if the offer delivers enough net funds and the priority conditions can be met within 20 business days.

Knote is the alternative when its final buffered exposure calculation accepts the security and its full quote gives better terms for Alex’s expected month-four exit. Its second mortgage product, as at October 2026, accommodates a six-month term. Its indicative establishment fee alone cannot decide the choice.

The sale exit must remain credible within the agreed term. Compare any minimum interest charge and the costs of an extension if the separate property’s sale is delayed. An advertised approval time cannot resolve the first lender’s documents or guarantee settlement by Alex’s deadline.

If those conditions remain unresolved, Alex’s stated fallback is to defer the equipment purchase. Do not turn an extension or a refinance with another private second mortgage lender into an assumed exit. Those are new lending decisions.

Once the provider and its written conditions are selected, use the second mortgage application guide for the application procedure. For broader private-lender options beyond this second-ranking scenario, use the private mortgage lender guide.