A Guide to Keystart Home Loans

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A Guide to Keystart Home Loans

Buying your home is both an exciting and daunting time. It’s likely to be the biggest investment you ever make, so it’s crucial to find the right loan, as well as the right home.

The Australian home loan market is very competitive and there are a wide range of options available. The best type of loan for you depends on your individual needs and financial circumstances. It’s important to do your research and compare home loan products. Key considerations include a home loan’s:

  • interest rate,
  • features and benefits,
  • accompanying fees and charges.

To help get you started, we’ve put together the main facts about Keystart home loans, which are a popular choice for Western Australian first home buyers.

What are Keystart home loans

A Keystart home loan is a low deposit, variable interest rate loan that’s available to all first home buyers across Western Australia, no matter whether you’re building a new house or buying an established home. These loans are for owner-occupiers.

Keystart home loans are an initiative of the State Government to help Western Australians who are unable to meet the deposit requirements of mainstream lenders. More than 100,000 Western Australians have taken out Keystart home loans to help them achieve the great Australian dream of home ownership.

Advantages of Keystart home loans

Key advantages of Keystart home loans include:

  • a low deposit of just 2% being required. Other lenders typically require at least a 5% deposit. If you’re a first home buyer, you can access the First Home Owner Grant of $10,000 through the State Government’s Department of Finance to help you with your Keystart loan deposit, provided you meet the eligibility requirements.
  • no lenders’ mortgage insurance (LMI) is required, which will save you thousands of dollars. LMI is typically charged by mainstream lenders if you have a deposit of less than 20% of your home’s value.
  • no monthly account-keeping fees are charged. This could also save you thousands of dollars over the life of your home loan.
  • they can be approved if you have no credit history (or even a bad credit history).
  • you can reduce your loan amount via taking out a shared home loan with the WA Housing Authority.
  • they are available if you have a disability that affects your housing needs.
  • they are also available under the Aboriginal Home Ownership Scheme.

What are the eligibility criteria for a Keystart home Loan?

To qualify for a Keystart home loan, you must meet all of the following eligibility criteria:

  • you’re over 18 years of age,
  • you’re either an Australian citizen or permanent resident,
  • you intend to build or buy a home in Western Australia,
  • you intend to live in the property that you’re buying for the duration of your loan,
  • you don’t already own a home or land, and
  • you have enough funds to cover all associated property purchase and moving costs.

Your annual income and property purchase price must fall within specific limits that are updated regularly.

Recent updates to Keystart income limits and interest rates

The annual income limits for Keystart home loan applicants have been increased for the second half of 2019. New limits for the Perth metropolitan area are outlined in the table below.

Type of applicant Annual Income Limit
Singles $105,000
Couples $130,000
Families $155,000

The property purchase cap in the Perth metropolitan area is currently $480,000.
Interest rates on Keystart home loans were decreased to just 4.94% in July 2019.

How to Apply for a Keystart home loan

You can apply for a Keystart home loan online. It’s best to do it before you start thinking about the type of home that you want to build or buy, so that you know your budget. There are 4 steps in the application process:

  • Step 1: finding out if you’re eligible. This process takes about 5 minutes. If not currently eligible, The Loan Company will work with you until you find yourself in a position where you are eligible.
  • Step 2: applying for a loan if you’re eligible. This usually takes about 20 to 30 minutes.
  • Step 3: pre-approval. Once your Keystart home loan has been approved, you can start planning or looking for your new home!
  • Step 4: finalising your application once you’ve chosen your new home.

You’ll need to provide:

  • all of your financial details, which includes your income and expenses, as well as any assets or debts that you currently have,
  • evidence of your employment details for the last two years, including the contact details of your employer/s.
  • evidence of your residential address for the past two years.

Why choose Now Living

At Now Living, we offer affordable house and land packages across Perth to suit all budgets and situations. In partnership with The Loan Company, we can help you find both the home and the loan that’s best for you (including helping you to source Keystart loans if you’re eligible).

Our new homes start from just $269K, which is well within the property purchase price cap for Keystart loans!

As one of our trusted partners, The Loan Company can provide you with the credit assistance that you need to make your home ownership dreams a reality. They offer a systemised and streamlined service that’s second to none, ensuring that you won’t have to deal with any of the stress that’s normally associated with organising a home loan.

Want to get into your new home sooner? Simply fill out this form to find out how much you can borrow and our team of experienced professionals will be able to help you.

Once you find out your budget, you can visit one of our display homes or explore our virtual display village online. We have a huge range of options for you to explore. You can choose from a range of architecturally designed, ready-built and move-in-ready homes.

Our goal is to help remove the uncertainty involved in buying your new home. From the moment we first speak with you, we will work together to ensure that there are no surprises or hidden costs waiting for you at the end. We’re also always happy to answer any questions that you may have.

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