What is the difference between a chattel and a conventional mortgage?

The main difference between chattel and traditional, or conventional, mortgages is that you can only use chattel mortgages for movable property. Conventional mortgages, on the other hand, are typically reserved for stationary homes. Also, chattel mortgages usually only finance the movable property itself and not the land where it sits.

What happens if you default on a chattel mortgage?

The movable property, called “chattel,” also acts as collateral for the loan. Basically, this means that if you default on your chattel mortgage, your creditor or lender can take possession of the property being financed and sell it to pay off the loan.

What is a chattel loan?

Vehicles: A chattel loan can serve to secure a loan for a car or other vehicle, typically for business purposes. This option is a more popular choice in countries with a national goods and services tax (GST) because the loan allows the vehicle’s owner to claim GST associated costs and vehicle depreciation on their taxes.