Companies often use chattel mortgages to buy new equipment. Heavy machinery has a long service life and its purchase can be financed by the seller for a certain period of time, but the seller will want to maintain a safety interest in the machine in the event of a breakdown. A mortgage allows the buyer to use the equipment while maintaining a safe position for the seller. The seller can recover and sell the equipment to compensate for credit losses in case of delay by the buyer. This document has been drafted in the form of a document and attests to the intention of the parties to transfer ownership of the chattels until the debt is repaid. In addition, legal hypothecs created by companies via their cats usually do not require additional formalities to make them effective. However, depending on the nature of the secured assets, it may be necessary to perfect the ownership of security by registering with Companies House or certain asset registers. For a cat mortgage to be a legal hypothec, it must transfer ownership of the cat (or cats) to the secured party (usually the lender) and contain an explicit or tacit reservation as to the repayment of the legal instrument to the debtor (known as repayment equity). (If the mortgage does not comply with the legal requirements of a legal hypothec, it can still be reorganized as an appropriate mortgage or a fixed or variable fee.) Mortgage repayment in most Australian states incurs stamp duty. Cat mortgages on certain assets (such as ships and planes) are subject to special rules.
 A mortgage is a loan agreement under which a personal movable asset serves as collateral for a loan. Movable property or property guarantees the loan and the lender holds a stake in it. A chattel mortgage is a formal term that refers to a financing agreement that provides funds for the purchase of an asset, and the financial service provider accepts that funded asset as collateral for the credit. In accordance with the rules of the Australian Taxation Office, companies that balance the GST in cash are entitled to claim an upstream tax credit for the entire GST included in the purchase price of the Chattel on their next proof of business activity. This chattel mortgage takes care of fees on chattels: a chattel mortgage has a similar structure to a traditional fixed-rate home loan or mortgage. Chattel`s home loans are called security agreements in some parts of the country. The terms „personal wealth security“,“pledge of personal property“ or even „mobile mortgage“ are also synonymous for a mortgage that is used in different jurisdictions around the world.