Financing a prime mover without sinking your home loan

5 October 2026 6 minute read Alen Slewa

Most of the owner-drivers I speak to are weighing up two things at once: the truck that earns the money, and the home the family lives in. Those two conversations usually happen with different people, months apart, and nobody joins them up.

That is where the damage gets done.

Start with the thing everybody gets wrong

If you have been told that a new prime mover can be instantly written off against your tax, that is not right, and it is worth being clear about before you sign anything.

The instant asset write-off is $20,000 per asset, for businesses with aggregated turnover under $10 million. It became permanent law for income years from 1 July 2026.

A prime mover costs many times $20,000. It does not qualify for the instant write-off.

What happens instead is that the truck goes into the small business simplified depreciation pool and is depreciated at 15% in the first income year and 30% in each year after that. You do get the deduction. You get it gradually.

I raise this because “you can write the whole thing off” gets said a lot around heavy vehicle sales, and people make a several-hundred-thousand-dollar decision partly on the strength of it. Your accountant is the right person to confirm your own position, but go in knowing the threshold is $20,000, not whatever the truck costs.

One upside of the write-off now being permanent: there is far less reason to rush a purchase into June for tax reasons. If the truck makes sense in October, buy it in October.

The house does not need to be part of it

The standard structure for a truck is a chattel mortgage. You own the vehicle from the day you take delivery, and the lender takes its security over the truck itself.

That is the important part. The security is the asset being financed. Your home does not need to be offered as security for a truck, and in most cases it should not be.

Where I do see houses dragged in, it is usually one of two situations: a borrower stretching past what the truck alone will support, or a lender relationship where everything has quietly ended up cross-secured over time. Both are worth unpicking before you add to them.

Balloon, residual, and the difference between them

These two words get used interchangeably and they are not the same thing.

A balloon belongs to a loan — a chattel mortgage. It is a lump of the principal that you defer to the end of the term instead of paying down along the way. You own the truck throughout, and at the end of the term you owe that amount.

A residual belongs to a lease. The financier owns the asset, you pay rentals for the use of it, and the residual is the value assumed to be left in it at the end of the term.

The distinction matters because ownership determines who claims depreciation, how GST is handled, and what you are left holding at the end. Which structure suits you is a conversation involving your accountant as much as me.

What a balloon actually does to you

A bigger balloon lowers your monthly repayment. That is the appeal, and it is genuine.

It does three other things at the same time.

1. You still owe the money. At the end of the term it is payable, and you will either have the cash, refinance it, or sell the truck to clear it.
2. You pay more interest overall. You are carrying a larger average balance across the term, so the total cost of the finance goes up even though each month feels easier.
3. You can end up underwater. If the truck is worth less at term end than the balloon you owe, that gap is yours to fund. Heavy vehicles can depreciate faster than a balloon amortises, particularly if the kilometres are high.

A balloon is a legitimate cash flow tool. It is not free money, and the number should be set against what you expect the truck to be worth, not against what makes the monthly figure look comfortable.

How the truck follows you into the home loan

Here is the part that catches people, and it works in two directions at once.

The repayment counts against you

When you apply for a home loan, the truck’s monthly commitment is deducted from your capacity. On top of that, regulated lenders have to assess you at a rate at least three percentage points above the actual rate on the home loan. With the cash rate at 4.60% after the Reserve Bank’s September 2026 rise, that assessment rate starts with an eight or a nine.

The depreciation also counts against you

The depreciation that reduces your tax bill also reduces the taxable income a home lender assesses you on. So the truck shrinks your assessed income at the same time as it adds a commitment.

The good news is that the second effect is often recoverable. Many lenders will add depreciation back when assessing a self-employed applicant, precisely because it isn’t cash leaving the business. Not all of them will, and the ones that do apply different rules. Choosing the right lender is most of the work here.

So which goes first?

There is no universal answer, but there is a usable rule.

If the home purchase is the time-critical one — a contract, a growing family, a lease ending — it generally goes first, while your commitments are light and your assessed income is at its highest.

If the truck is what earns the income, it goes first, and the home loan gets structured around it. That is a perfectly workable sequence as long as the truck finance is set up knowing a home application is coming.

What does not work is financing a truck in March and applying for a home loan in June without having run the two together. By then the commitment is on your file and the structure is fixed.

The practical ask

If both are on the horizon in the next year or two, say so at the first conversation — even if only one of them is imminent.

I would rather model both against your income now and tell you the order that costs you least, than restructure something afterwards. Get in touch and we can map it out before anything is committed.