First Mortgage
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
First Mortgage is the loan that holds first-ranking security over a property, giving that lender first claim on the proceeds if the property is sold. For example, a bank might hold a first mortgage at around 70 percent LVR while a private lender's second mortgage sits behind it. The first mortgagee's priority is why a deed of consent is often needed before a second lender can register.
Why First Mortgage Matters
First-ranking security is the strongest position a lender can hold, which is why it sets the priority for everything behind it.
- Holds first claim on a property's sale proceeds
- Ranks ahead of any second mortgage or caveat loan
- Usually the cheapest debt against the property
- A registered mortgage records the lender's priority
- Controls whether later security can be registered
Common Features of First Mortgage
- First-ranking registered security
- Priority over all later charges
- Lower rate than subordinated debt
- Often held by a bank or major lender
- Consent needed before a second ranks behind it
Official reference: moneysmart.gov.au
What is a first mortgage?
The loan with first-ranking security over a property, paid first if the property is sold.
How is a first mortgage different from a second?
A first ranks ahead; a second mortgage ranks behind it and carries more risk.
Is a first mortgage cheaper?
Usually, because first-ranking security is the lowest risk for the lender.
What is a registered first mortgage?
A registered mortgage recorded on title that fixes the lender's first-ranking priority.
Why does a second lender need the first mortgagee's consent?
Because the first holds priority, a deed of consent is often needed before a second can register.