What is an 'all monies' clause, and what does it mean if I put my house up for a business loan?

Mr says: an all monies mortgage doesn’t just back the loan you’re signing for. It backs everything you owe that lender, today and later. If your house goes up as security for a business loan on those terms, it can quietly end up securing your overdraft, your business card and any guarantee you sign down the track. You can usually ask for something narrower. Ask before the pen comes out, not after.

Most owners read the loan amount, the term and the repayments, and skim the security documents. Fair enough: they’re long and dull. But one definition in there, usually called “secured money” or “secured moneys”, decides how much of your life your house is actually backing.

What does an all monies clause actually say?

The wording varies, but the idea is the same. The mortgage secures all amounts you owe, or may owe, the lender for any reason. That includes money owed alone or jointly, now or in future, under any loan, account, card or guarantee.

Compare the two styles:

	All monies mortgage	Limited (specific-debt) mortgage
What it secures	Every amount you owe that lender, on any account	Only the loan named in the document
New facilities later	Usually covered automatically	Not covered unless you sign new security
Guarantees you give that lender	Often covered	Not covered
Getting the mortgage released	Usually every secured debt must be cleared	Clear the named loan and it’s released
Lender’s view	Simpler, more protection	More paperwork, less flexibility

Neither is illegal or unusual. All monies wording is very common in standard mortgage documents because it saves the lender re-papering security every time you add a facility. The problem is when the owner doesn’t realise it’s there.

Mr’s rule of thumb: if you can’t find the words “secured money” in your mortgage, ask the lender where they are. That definition is the clause that matters.

What can my house end up backing?

Here’s where all monies wording bites for business owners. If you own your home personally and your company borrows, you’ll usually give a guarantee and a mortgage over the house to support it. On all monies terms, that one mortgage can secure:

• The business loan you signed it for. Expected.
• The home loan with the same lender. Also expected, but now tied to the business debt.
• An overdraft or business card added later. Often done over the phone, without anyone mentioning the house.
• Any guarantee you sign for that lender. Your brother’s ute finance, your partner’s company, a supplier facility at the same bank.
• Equipment finance with the same group. If it’s the same lender, check whether it’s included.

There’s a second effect owners miss. With everything secured by one property, a default on the business side can put the house at risk even when the home loan repayments are perfectly up to date. Most loan agreements also carry cross-default clauses, which let a default on one facility count as a default on all of them.

Not sure what a term in your offer means? Mr’s loan jargon decoder gives one-line definitions of the security words you’ll meet.

What does the Banking Code say about guarantees?

If your lender is a bank that subscribes to the 2025 Banking Code of Practice and your business meets the Code’s small business test, there are real protections around guarantees from individuals. Here’s what the Code sets out:

• Your liability must be limited. Clause 102 says a guarantee will be limited to a specific amount or category of amounts (such as everything owing under a specific loan, plus interest and costs), or to the value of a specified property under a specified mortgage at the time of recovery.
• You must be told about future debts. Clause 103 requires a prominent notice that, where applicable, the guarantee “may cover future credit facilities and variations of the existing Loan”.
• New loans only fit inside your limit. Clause 119 says new or changed loans may be covered by your guarantee only to the extent they fall within its limit.
• You can ask to limit it further. Under clause 116 you can write to the bank to limit, or further limit, what you’ve guaranteed. The bank can refuse in some cases, such as when the new limit wouldn’t cover the borrower’s existing debt.
• Small business test. The 2025 Code covers a business with turnover under $10 million, fewer than 100 full-time equivalent staff and less than $5 million total business debt (undrawn limits and the new loan count).

Two honest caveats. First, directors who guarantee their own company’s loan get fewer of the procedural protections: sole directors, for example, aren’t owed the disclosure documents, meeting or three-day wait. Second, the Code binds subscribing banks. A non-bank or private lender isn’t bound by it, so with those lenders the loan documents are the whole story.

If you want a refresher on how guarantees work for company borrowers, see do I need a personal guarantee?.

Weighing up whether to put the house on the line at all? Check your options with Mr. Asking won’t leave a mark on your credit file.

A worked example: the business loan is gone, the mortgage isn’t

Illustration only. Made-up numbers, not a real client.

An electrician in Toowoomba runs his business through a company. Four years ago, the company borrowed $180k from the bank that also holds his home loan, and he gave a guarantee plus a mortgage over the family home. The mortgage was all monies.

Since then, a few things were added without much thought:

1. A $40k business overdraft, set up over the phone.
2. A business credit card with a $20k limit.
3. A guarantee for his sister’s café equipment loan at the same bank.

This year, the business is doing well and he refinances the $180k loan to another lender on better terms, expecting the house to be freed up. The bank’s discharge team says no. The overdraft, card and his sister’s loan are all still secured by the same mortgage. Before the house comes off, those facilities have to be repaid, closed, or the bank has to agree to release them.

None of that is the bank misbehaving. It’s what he signed. The fix took weeks: closing the card, moving the overdraft and asking his sister to refinance her equipment loan so his guarantee could be released.

What would have helped? A mortgage limited to the $180k facility, or a written list of every debt the mortgage secured before he added each new one.

How do I get a narrower mortgage?

Lenders won’t always agree, but you lose nothing by asking. In order of how often Mr sees them work:

1. Ask for a specific-debt mortgage. Request that the security be limited to the facility in the letter of offer. Some lenders will agree, especially for one-off property-secured loans.
2. Ask for a cap. If they won’t limit it to one facility, ask for a maximum: a stated dollar figure plus interest and enforcement costs.
3. Keep the business loan with a different lender. If your home loan sits with one bank, borrowing for the business elsewhere, through a second mortgage or a caveat, keeps the two debts in separate boxes.
4. Consider not using the house at all. Plenty of trading businesses qualify for unsecured or cash flow lending sized on turnover. Mr compares the two in secured or unsecured business loan?.
5. Get the list in writing. Whatever you sign, ask the lender to confirm which facilities the mortgage secures, and ask again each time you add one.

Reading the security documents is also where Mr’s 14 questions to ask before you sign a business loan offer earn their keep. And as business.gov.au puts it, read each loan’s terms and conditions carefully, including the security requirements.

Is an all monies clause unfair, and can I challenge it?

Usually not, on its own. All monies wording is standard and courts have generally enforced it, particularly where the borrower was told about it.

The unfair contract terms law does apply to many small business loans. According to ASIC, it covers standard form contracts for financial products where the business has fewer than 100 employees or turnover under $10 million, and the upfront price payable is no more than $5 million. Since late 2023, lenders can face penalties for proposing or relying on unfair terms. ASIC’s examples include one-sided variation powers and default fees that go well beyond the lender’s real costs. Only a court can declare a term unfair, though.

If something in your documents genuinely worries you, the practical order is: raise it with the lender before signing, use the lender’s complaints process if it’s already signed, then the Australian Financial Complaints Authority. For anything involving your home, a short session with a lawyer before you sign is money well spent.

Your house deserves a loan that’s built around it

Putting the family home behind the business is a big call, and the right structure matters as much as the right lender. Sometimes property security is the smart move. Sometimes a narrower mortgage, a separate lender or an unsecured option does the same job with far less on the line.

If you’d like a straight answer on what your business could borrow, and what it would really ask of your house, the enquiry takes about 60 seconds and your credit file isn’t touched just for asking. Your enquiry isn’t shopped around a crowd of lenders, so there’s no flood of calls. A real person reads your enquiry, looks at how your property, company and existing loans fit together, and phones you to talk it through. Please fill the form in accurately, including who owns the property and which lenders you already bank with, so we can match the right option the first time.

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