Almost every person who has ever owned a property has only been able to finance this purchase through the assumption of a debt to a bank.  The way that a bank secures a debt for something of this size is almost always through a mortgage because a mortgage is the best method of securing a loan in legal terms which is available to a bank.  The law of mortgages, surprisingly, varies from state to state in Australia although has been harmonized somewhat during the most recent period because of the introduction of the national consumer credit code, otherwise known as the National Consumer Credit Protection Act 2009 (Cth).  The introduction of this legislation supersedes the old credit codes which were originally based on Queensland consumer credit legislation but were implemented in New South Wales, Victoria and some of the other states and territories of Australia.  However, this is not the original source of the law of mortgages.  In New South Wales, for example, the Real Property Act 1900 (NSW) is the piece of law which establishes the notion of a mortgage in the law in New South Wales and defines the rights which a mortgage interest in a property creates and makes it so suitable for the purpose of securing a loan.

For instance under s.57(2)(b) a bank can issue a notice which then gives rise to the ability to the mortgagor (the legal person holding the mortgage) to sell the property without the consent of the owner of the property and without any reference to the need to get a good price for the sale. This is one of the elements of the law of mortgages that few people realize.  If you are unable to pay a mortgage and the bank issues a notice to sell it, there is no obligation on the bank to attempt to get a good price for the property and they will likely sell to the first available buyer.   If you have any questions about the way that the law of mortgages operate in Australia, please do not hesitate to contact us.