The Finance Algorithm

Equipment Finance Calculator

Calculate repayments for equipment finance, chattel mortgage, and hire purchase. Compare leasing vs buying for tax and cash flow impact.

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$80k

The purchase price of the equipment before GST

$
$0

Any upfront deposit or value of equipment being traded in

%
7.5%

The rate you've been quoted. Lenders price equipment finance by asset, term and your business

5

Typically 2-7 years depending on the equipment's useful life

Each type has different tax, GST, and ownership implications

%
20%

Final payment as % of equipment cost (reduces monthly repayments)

%
25%

Your company tax rate or marginal rate (sole trader)

The button asks our AI to explain these figures in words.

Equipment finance breakdown

Monthly repayment

$1,382

excludes residual

Balloon at end

$16,000

due in final payment

GST claimable

$8,000

claim upfront in BAS

After-tax cost

$66,209

$24,736 tax saved

Principal vs interest over the term

Chattel mortgage + hire purchase let you claim GST upfront and depreciate the asset. Lease products spread the deduction across payments instead.

$98,946total
Principal80.9%
Interest19.1%

Monthly repayment by finance term

Match the term to the asset's useful life. Over-financing a 3-year asset for 7 years means paying for something that's already worn out.

$2,9802y$2,0913y$1,3825y$1,0827y$86010y

Monthly repayment by residual %

Higher residual = lower monthly, but you owe a big lump sum at the end. Match it to the asset's expected resale value.

$1,6030%$1,49310%$1,38220%$1,27230%$1,16240%
Check the Instant Asset Write-Off. Eligible assets may be 100% deductible in the year of purchase (current threshold varies: check the ATO). That changes the after-tax cost significantly. Always compare chattel mortgage against finance lease: different tax treatment, different cash-flow profile.

How it works

Equipment finance lets businesses acquire vehicles, machinery, technology, and other assets without paying the full cost upfront. In Australia, the main options are chattel mortgage (you own it, claim GST upfront), hire purchase (you own it after final payment), finance lease (lender owns it, you lease it), and operating lease (pure rental). Each has different tax, GST, depreciation, and cash flow implications. This calculator compares them so you can choose the best structure for your business.

  1. 1Enter the equipment cost (GST-exclusive).
  2. 2Add any deposit or trade-in value.
  3. 3Input the interest rate offered.
  4. 4Choose the finance term.
  5. 5Select the finance type to compare tax treatment.
  6. 6Optionally set a residual value to reduce monthly repayments.
  7. 7See repayments, total cost, and tax benefits.

The figures today

As of 7 November 2026, the lowest business loan rate is 6.33%, from SCCU's BUSINESS LOAN, while the typical best across 47 institutions is 7.89%. The lowest business overdraft rate is 8.24%, from IMB Bank's Commercial Credit line, while the typical best across 12 institutions is 10.06%.

Business banking rates

Worked examples

Work Ute: Chattel Mortgage

A tradie buys a $65,000 (ex-GST) Toyota HiLux via chattel mortgage at 6.9% over 5 years, 20% residual.

Financed amount: $65,000. Monthly repayment: $1,102. Residual (balloon): $13,000 due at end. Total of repayments: $66,118; total paid including the balloon: $79,118. GST claimed upfront: $6,500. The vehicle is depreciated over its effective life and the interest is deductible, so the after-tax cost is lower; at $65,000 it is above the $20,000 instant asset write-off threshold.

Restaurant Equipment: Finance Lease

A restaurant leases $120,000 of kitchen equipment via finance lease at 8.5% over 7 years, no residual.

Monthly payment: $1,900. Total paid: $159,632. Total interest: $39,632. As a finance lease, the full $1,900/month is 100% tax-deductible. At 25% company tax, the after-tax cost is ~$1,425/month. No GST claimed upfront, but GST is embedded in the payments.

Questions people ask

What's the difference between a chattel mortgage and a hire purchase?
Chattel mortgage: you own the asset from day one, and it's registered in your name. The lender has a charge (mortgage) over it. Hire purchase: the lender owns the asset until all payments (including any residual) are made. Both allow GST claiming and depreciation. Chattel mortgage is more common for vehicles; hire purchase for other equipment.
Can I claim the Instant Asset Write-Off?
From 1 July 2026, the Instant Asset Write-Off is a permanent feature of the tax system (no longer an annually-renewed budget measure): businesses with aggregated turnover under $10 million can immediately deduct the full cost of eligible assets costing under $20,000 each, rather than depreciating them over several years. This applies to the total cost of the asset, regardless of the finance method used. Consult your accountant to confirm eligibility for your specific asset.
Should I lease or buy equipment?
It depends on what matters to the business. A chattel mortgage gives ownership from day one, an upfront GST claim and depreciation deductions. A lease keeps the asset off your hands at the end, with deductible lease payments, which can suit equipment that dates quickly. The calculator compares the cost of each on your figures.

The terms, in plain English

Chattel Mortgage
A finance arrangement where you own the asset from day one, with the lender holding a mortgage over it as security. You claim GST upfront and depreciate the asset.
Residual Value (Balloon)
A final lump-sum payment at the end of the finance term. Setting a residual reduces monthly repayments but means you owe a large amount at the end.
Finance Lease
An arrangement where the lender owns the asset and leases it to you. Payments are 100% tax-deductible. At the end, you can purchase the asset for a nominal amount, re-lease, or return it.
Instant Asset Write-Off
A permanent tax feature (from 1 July 2026) letting businesses with turnover under $10 million immediately deduct the full cost of eligible assets under $20,000 in the year of purchase, rather than depreciating over several years.

Official sources

Business Loan Calculator

Compare equipment finance with a standard business loan.

Break Even Calculator

Include equipment finance repayments in your break-even analysis.

GST Calculator

Calculate GST on equipment purchases for BAS claims.