Cross-Collateralisation: Selling One Property

What selling or refinancing one cross-secured property involves, and how one Queensland title comes out of the mortgage.

Last reviewed 13 October 2026. Reviewed against ASIC MoneySmart and ATO guidance, 13 October 2026. Credit assistance is provided under Australian Credit Licence 388789, which authorises credit services only. FAA is not a lender. General information only, not personal financial, credit, tax or legal advice. FAA Property does not provide personal financial, tax or SMSF advice. Financial advice sits with other FAA Group companies, which are authorised representatives of Lifespan Financial Planning Pty Ltd (AFSL 229892).

If you hold more than one property with the same lender, selling or refinancing one of them starts with its title. In Queensland a registered mortgage is a charge on the lot. It stays there until the lender signs a release and the release is registered with Titles Queensland. The sections below set out what two lenders publish about a partial discharge, what the Land Title Act 1994 says about releasing one title, how a refinance works when securities are tied, and what the Property Law Act 2023 requires before a mortgagee sale. Every source was read on 13 October 2026. This is general information. How a loan is secured or released is assessed by a lender or broker, not by FAA Property.

What happens when you sell one cross-secured property

The mortgage stays on that property's title until your lender signs a release and the release is registered. What the lender asks for before it signs depends on its own terms.

The sequence below follows one Queensland rental out of a cross-secured structure. The title steps come from the Land Title Act 1994 and Titles Queensland. The lender steps come from Macquarie and Bankwest, which publish their terms. Yours may differ, so read each lender step as a question to ask.

What Macquarie and Bankwest publish about a partial discharge

Both lenders publish terms for releasing one property while the loan stays open, and both attach conditions.

Macquarie's help page describes a partial discharge as having more than one property securing your home loan facility and wanting to release or sell one or more, leaving the facility open. It's subject to a credit assessment, Macquarie says. When you ask for one, Macquarie's page lists what to send with its form: the sale price if you're selling, the estimated value of the remaining property or properties, any change of loan purpose (investment or owner occupied, for example) for what remains, any changes to your financial circumstances since your last application, the new balance and limit of your accounts, and any changes to your offset account linkage.

Bankwest's Discharge Authority form (BWE-1178) says a partial discharge is when you have more than one property attached to a loan and not all are being discharged. The loan carries on, with a reduced limit from removing a property. The form must be signed by all borrowers, guarantors and security owners listed on it. Whoever signs acknowledges that if more than one property secures the loans, the total amount secured may be reduced using settlement funds.

APRA's capital guidance to banks, APG 112, deals with a separate matter: how a bank works out the loan to value ratio (LVR). Where one property loan is secured by multiple properties, the bank must use the aggregate value of the mortgaged properties. Where loans aren't cross-collateralised, APRA says collateral values may be allocated across the loans, with no double counting. That guidance is written for banks about their capital. It makes no statement about a partial discharge.

Two lenders aren't every lender. Your own lender's terms are the ones that apply to you. A lender or broker assesses this, not FAA Property.

How one Queensland title is released from a mortgage

The lender's release has to be registered before the lot is free of the mortgage, and Queensland law lets a release cover all or part of a mortgage.

The rules are in the Land Title Act 1994 (Qld). The wording below is from the in-force version dated 1 August 2025.

• Section 72(1). A lot may be mortgaged "by registering an instrument of mortgage for the lot".
• Section 74. A registered mortgage "operates only as a charge on the lot or interest for the debt or liability secured by the mortgage".
• Section 81(1). When a release is lodged, the registrar may register it "to the extent shown in the instrument of release".
• Section 81(2). The release may release the debt or liability secured for all or part of the mortgage, or for one or more of the mortgagors.
• Section 81(3). On registration, "the mortgage is discharged, and the lot is released from the mortgage, to the extent shown in the instrument of release".

Titles Queensland's guide to a release is written for a mortgage that's been repaid. It says the lender signs a document to release the mortgage from your property, and that the release form "must be registered with Titles Queensland for the mortgage to be released".

So ask your lender exactly which lot and which debt its release will cover. This is general information, not legal advice.

Refinancing one property when the securities are tied

Refinancing one property to a new lender means the current lender has to discharge its mortgage on that title first, according to Bankwest's glossary. The second bank can then place its own mortgage on the title.

Where your other properties stay with the first lender, not all of the security is being discharged. That's how Bankwest's form defines a partial discharge. Bankwest's glossary, in its own words: "If you change a loan or property (like refinancing or selling), it may affect anything that's cross-collateralised."

There are fees to check. Moneysmart lists a break fee if you're on a fixed rate loan, and a discharge (or termination) fee when you close your current loan. The amounts are your lender's to quote.

One tax point. The ATO says you can't claim interest on a loan you used to buy a new home that doesn't produce income, even if your rental property is the security for that loan. The rest of the tax detail is in how a new loan is secured when you use equity. This is general information, not tax advice.

How to tell whether your properties are tied

Your loan contract and your lender are where to find out. A title search gets you part of the way.

A Titles Queensland current title search shows the current owners of a lot and other registered interests, including mortgages. The dealing number of a mortgage and the mortgagee's details are available from your lender or from that search. Under section 73(1) of the Land Title Act 1994, the mortgage instrument must include "a description of the debt or liability secured by the mortgage".

A current title search shows that a mortgage is registered, not which loans it secures. Titles Queensland also sells an image of a registered dealing, which includes mortgages, and the mortgage instrument is the document that must describe the debt secured. Search each title to see whether a mortgage is registered and to whom. Then read the loan contract and ask the lender which properties secure which loans.

Buying, not selling? See title searches when you buy an investment property.

What Queensland law requires before a mortgagee sale

Under section 114 of the Property Law Act 2023 (Qld), a mortgagee must not exercise a power to sell the property unless and until a default has happened under the mortgage, the mortgagee has given a notice requiring the default to be remedied within 30 days, and the default hasn't been remedied in that period.

The rules are in Part 8 of the Property Law Act 2023 (Qld), which applies to a mortgage over land under the Land Title Act 1994. The Act commenced on 1 August 2025. The wording below is from the in-force version dated 28 April 2026.

Section 118 applies if a mortgagee exercises a power of sale. It says nothing about a sale you make yourself. Section 118 speaks of the amounts "owing under the mortgage", and section 74 says a registered mortgage is a charge "for the debt or liability secured by the mortgage". What that covers for your loans is a question for your lender or a solicitor.

Moneysmart, ASIC's consumer site, has separate guidance for any borrower who falls behind. It says lenders have to follow a specific set of steps before they can take your home, and that a default notice will give you 30 days to make the payments you've missed plus the regular repayment. Repossession doesn't release you from the loan, it says, and the lender may recover any outstanding balance through further legal action, which can include a claim to sell your other assets.

Its advice is short: "If you receive a default notice, do not ignore it. Talk to your lender or get free legal advice immediately." This section is general information, not legal advice.

Questions to take to a lender or broker

These go to your lender or broker. ASIC says a credit licensee's responsible lending obligations involve making reasonable inquiries about your financial situation, taking reasonable steps to verify it, and assessing whether the credit contract is not unsuitable for you. A lender or broker assesses this, not FAA Property.

For the property side of a next purchase, see building a property portfolio in Queensland. The steps around it are in the full investment purchase process.

FAA Property is a licensed Queensland real estate agency. It sources new-build and house-and-land investment property across South East Queensland, and it's paid by builders and developers when a purchase proceeds. How a loan is secured, released or refinanced is assessed by a lender or broker, not by FAA Property. There's more on using equity to buy an investment property with FAA Property.

Where to next

• Using equity to buy an investment property with FAA Property
• How a new loan is secured when you use equity
• Building a property portfolio in Queensland
• Title searches when you buy an investment property
• The full investment purchase process
• How much cash an investment purchase needs
• Warning signs of a property spruiker