Cross-Collateralisation
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
Cross-Collateralisation is using more than one asset as security for a loan or set of loans, so the assets are linked rather than each securing its own debt. A common example is using an existing home and a new investment property to secure one loan; many borrowers later de-cross the securities when they refinance to regain flexibility. Lenders use it to lift total LVR or approve a deal a single asset could not support, often with a second mortgage or a commercial property loan.
Why Cross-Collateralisation Matters
Cross-collateralisation can unlock borrowing power, but it ties your assets together in ways that limit flexibility later.
- Multiple assets secure one or more loans together
- Can lift total LVR and approval capacity
- Common with a second mortgage or commercial lending
- Selling one asset can require restructuring the loan
- Increases the lender's security and your exposure
Common Features of Cross-Collateralisation
- Two or more assets held as combined security
- Linked loan-to-value across the assets
- Releasing one asset needs lender approval
- Affects a loan covenant and refinancing options
- Often unwound, or de-crossed, at refinance
Official reference: moneysmart.gov.au
What is cross-collateralisation?
Using more than one asset as security for a loan, so the assets back each other rather than standing alone.
Why do lenders cross-collateralise?
To lift total LVR or approve a deal a single asset could not support on its own.
What is the downside?
Less flexibility. Selling or refinancing one asset can require the whole structure to be unwound.
Is cross-collateralisation common in commercial loans?
Yes, especially with a commercial property loan or a second mortgage across multiple properties.
Can I undo cross-collateralisation?
Usually with lender approval and sometimes a revaluation, since releasing one asset affects the others.