Model your farm equipment finance repayments and compare chattel mortgage, hire purchase, and finance lease structures side by side. See GST credits, depreciation benefits, and instant asset write-off eligibility for your agricultural machinery.
| Frequency | Repayment | Total interest | Total cost |
|---|---|---|---|
| Weekly | $540.88 | $20,629 | $140,629 |
| Fortnightly | $1,082.33 | $20,703 | $140,703 |
| Monthly(selected) | $2,347.94 | $20,876 | $140,876 |
Same asset, same inputs. Different structures change the tax treatment and total cost.
| Chattel Mortgage | Hire Purchase | Finance Lease | |
|---|---|---|---|
| Monthly repayment | $2,347.94 | $2,347.94 | $2,347.94 |
| Total cost | $140,876 | $140,876 | $140,876 |
| Total interest | $20,876 | $20,876 | $20,876 |
| GST credit | $10,909 | On each payment | On each payment |
| Annual depreciation benefit | $2,727 | $2,727 | N/A (payments deductible) |
| Annual interest deduction | $1,044 | Not until ownership | Included in payments |
| Est. total tax benefit | $29,765 | $13,636 | $35,219 |
| Est. net cost after tax | $111,112 | $127,240 | $105,657 |
Tax benefit estimates are indicative only and based on simplified assumptions. Actual tax outcomes depend on your individual circumstances, business structure, and other factors. Consult your accountant or tax adviser for advice specific to your situation.
Switching from monthly to weekly repayments could save you $248 in interest over the life of this finance.
The structure comparison table shows how chattel mortgage, hire purchase, and finance lease differ for the same inputs. The tax treatment can make a significant difference to the net cost of your farm machinery.
Toggle the instant asset write-off on to see whether your asset qualifies. For eligible assets under $20,000, the year one tax benefit can substantially reduce the effective cost.
A higher balloon reduces your regular repayments, which can help manage cash flow between harvests. Use the slider to see how different balloon levels affect your repayments and total cost.
Base rate entities (turnover under $50M) pay 25% company tax. Non-base rate entities pay 30%. The tax rate affects the value of every deduction, so switching between them shows a meaningful difference in net cost.
Most lenders want to see at least 12-24 months of trading history. Established farming operations with consistent production records are viewed favourably. Newer operations may need to provide a business plan or larger deposit.
Lenders review your farm financials including profit and loss, balance sheet, and recent tax returns. Seasonal income variation is understood by agricultural lenders — they focus on your average annual cash flow and overall position.
The type, age, brand, and condition of the farm equipment affect the rate and terms. New equipment from major manufacturers (John Deere, Case IH, New Holland) attracts better rates. Used equipment is assessed on age, hours, and maintenance history.
Your personal and business credit history influences the rate. A clean credit file opens access to the most competitive rates. Some specialist agricultural lenders can work with less-than-perfect credit if the farming operation is strong.
Compare farm equipment finance from 50+ lenders. Find a structure and rate that works for your operation.
Subject to lender approval, terms and conditions apply.
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Farm equipment finance rates in Australia typically range from 5% to 9% p.a. depending on the type of machinery, your farming operation's financial history, the lender, and whether the equipment is new or used. Primary producers with strong trading history and established operations often qualify for rates at the lower end. The rate used in this calculator is for illustration only.
Yes. Most lenders finance used agricultural equipment, though age and condition limits apply. Tractors and harvesters up to 15-20 years old can often be financed, depending on the hours logged and overall condition. Older machinery may attract a slightly higher rate and shorter maximum term. Some specialist agricultural lenders are more flexible on age limits for well-maintained equipment.
A good rule of thumb is to match the finance term to the useful life of the equipment. For a tractor with 15-20 years of useful life, a 5-7 year term is common. For shorter-life implements like spray rigs or seeders, 3-5 years may be more appropriate. Keeping the term shorter than the useful life means you avoid paying off equipment that has already been replaced.
Not always. Many lenders offer 100% finance for farm equipment, particularly for established farming operations with a strong financial position. However, a deposit of 10-20% can reduce your interest rate, lower monthly repayments, and improve your chances of approval. Trade-ins of existing equipment can also serve as a deposit.
Yes. Primary producers can claim tax deductions for farm equipment under several provisions. Under a chattel mortgage, you can claim depreciation on the asset plus deduct the interest. Finance lease payments are fully deductible. Additionally, primary producers may be eligible for accelerated depreciation on certain water and fencing assets. The instant asset write-off applies to eligible assets under the current threshold. Consult your accountant for advice specific to your operation.
Balloon payments can be a useful strategy for farming businesses with seasonal cash flow. A larger balloon (residual) reduces your regular repayments throughout the year, which helps during off-season months when income is lower. You then pay the balloon at the end of the term — ideally timed to coincide with harvest income or a crop sale. However, the balloon increases total interest paid, so weigh the cash flow benefit against the extra cost.
Results are estimates only and should not be relied upon for financial decisions. Actual farm equipment finance repayments will depend on the lender, your credit profile, and the specific terms offered. Interest rates used are for illustration purposes only and may not reflect current market rates.
Subject to lender approval, terms and conditions apply.
This calculator is general information only and is not financial advice.