Using Your Mortgage to Buy a Ute? You Could Be Paying the Price of a Second One

PERTH, AUSTRALIA - 23rd July 2025 - As interest rates remain high and small business costs climb, many tradies are redrawing on their home loans to pay for new vehicles and equipment. But according to finance expert Nathan Hanna, that shortcut could quietly cost them tens of thousands of dollars and limit their ability to claim business expenses.

"A lot of tradies look at their mortgage rate and think it's the cheapest option," says Hanna, Director of Hanna Lending Services. "What they don't realise is how much they'll end up paying over time. Stretching the cost of a ute over 20 years doesn't make it cheaper. It makes it a financial liability."

Here's how the numbers stack up

Redrawing $75,000 from your mortgage at 5.85 percent with 20 years remaining might seem like the easy choice, until you realise it could cost you over $28,000 in interest alone. That's money spent on nothing but time. In comparison, financing the same amount over 5 years through a properly structured asset loan could save you more than $14,000 in interest.

"You've basically paid for two Hiluxes and only driven away with one," says Hanna. "And the kicker is, you'll still be making repayments long after the vehicle has depreciated, worn out, and been replaced. That's how you trap cashflow without even realising it."

Timing matters, especially when you're on the tools

Most redraws take weeks to process. For tradies relying on a vehicle or machine to start a contract, that delay can mean missed income. In some cases, it could mean losing the job entirely to someone who was ready to go.

Asset finance, on the other hand, can often be approved and settled in five working days.

The tax trap most tradies don't know about

There's another cost to using your home loan that doesn't show up on your bank statement. The ATO doesn't treat redraws as business finance, which means you could miss out on deductions.

"If you're self-employed and buying gear for work, the way your loan is structured affects what you can claim," says Hanna. "With the right setup, like a chattel mortgage or lease, you may be able to claim the interest, depreciation or repayments. You can't do that with your home loan."

For new business owners, sole traders or subcontractors buying their first work vehicle, these deductions can reduce your tax bill and ease cash flow in the early stages.

Finance That Fits How Tradies Actually Work

Hanna Lending works with tradespeople every day to finance utes, trucks, trailers, and tools. The goal is not just fast approvals but smarter decisions that support long-term growth.

"Banks won't ask about your business plan or how the loan fits into your long-term strategy. They'll offer a standard product and move on. We take the time to understand what stage your business is at, what you're trying to build, and how finance can support that. Whether you're just starting out, scaling up, or trying to manage cash flow between jobs, we look at the whole picture. It's not just about getting approved, it's about making sure the structure of the loan works for you now and in the long run. That's the difference."

About Hanna Lending Services
Hanna Lending Services is a WA-based finance brokerage helping Australians secure vehicle, equipment and personal finance with clarity and confidence. With over a decade of experience and thousands of loans funded, Hanna Lending focuses on real outcomes, not just interest rates.

https://hannalendingservices.com.au