What Is an All-Moneys Clause?
An all-moneys clause (sometimes called an "all obligations" or "all indebtedness" clause) is a standard provision in many Australian mortgages. It means the security property isn't just secured against the home loan — it's secured against all debts you owe to that lender.
So if you have a home loan, a credit card, a personal loan, and a business overdraft — all with the same bank — your property potentially secures all of those facilities, not just the mortgage.
Why Does This Matter for Second Mortgages?
When a second mortgage lender assesses your application, they need to know the total debt secured against your property. If your first mortgage has an all-moneys clause, the second lender must account for all debts covered by that clause — not just the home loan balance shown on your statement.
This can significantly impact your available equity calculation:
Without all-moneys clause:
- Property value: $1,000,000
- First mortgage: $400,000
- Available at 70% LVR: $700,000 – $400,000 = $300,000
With all-moneys clause (same bank credit card $20K, business loan $80K):
- Property value: $1,000,000
- Secured debts: $400,000 + $20,000 + $80,000 = $500,000
- Available at 70% LVR: $700,000 – $500,000 = $200,000
That's a $100,000 difference in borrowing capacity — simply because of the all-moneys clause.
How to Check If Your Mortgage Has One
Almost all mortgages with major Australian banks include an all-moneys clause. It's typically found in the mortgage terms and conditions, not the loan contract itself. Look for language like:
"The mortgagor mortgages the property to secure payment of all moneys owing or that may become owing by the mortgagor to the mortgagee."
If you bank with a Big Four bank (CBA, Westpac, NAB, ANZ), it's safe to assume your mortgage includes this clause.
What Can You Do About It?
You have several options to manage the impact of an all-moneys clause:
1. Consolidate or Close Other Products
If you have credit cards or lines of credit with the same bank as your mortgage, consider closing them before applying for a second mortgage. Even if the balance is zero, the facility limit may still be counted.
2. Move Banking Products
Transfer credit cards, business loans, or overdrafts to a different bank. Once these facilities are no longer with the same lender as your mortgage, they won't be captured by the all-moneys clause.
3. Declare and Account for It
When you apply for a second mortgage, declare all debts with your first mortgage lender. Your application should list these in the additional debts section so the LVR assessment is accurate from the start.
The All-Moneys Clause in Practice
In practice, not every lender will enforce the all-moneys clause to its fullest extent. Some second mortgage lenders take a pragmatic approach — if your credit card limit is $10,000 but your balance is $500, they may use the actual balance rather than the limit.
However, the conservative approach (using facility limits) is more common, so it's best to plan accordingly.
Key Takeaway
The all-moneys clause is one of the most commonly overlooked factors in second mortgage applications. Understanding it before you apply means no surprises during assessment. If you have multiple banking products with the same institution as your mortgage, factor the full amount into your equity calculations — or consider restructuring before you apply.
