Keystart Boost is Great News for First Home Buyers

06 Jan 2019| Posted by: Geoff Baldwin

In an exciting late December move that was missed by many in the community and the real estate industry, the West Australian government announced it will expand its Keystart loan book by more than $420 million to help stimulate greater demand in the housing market.

The plan is to encourage more homebuyers to the property market and will have a positive ripple effect on jobs and the WA economy.

More than one third of all first home buyers in WA access finance through Keystart and with banks tightening their lending guidelines it is expected that more people will turn to the Keystart option.

Keystart offers an attractive alternative to conventional banks. As the most successful scheme of its kind in Australia Keystart reduces financial barriers for Western Australians entering the property market.

First homebuyers engaging a traditional lender generally require a deposit of at least 20 per cent of the property value in order to avoid paying Lenders’ Mortgage Insurance, but under Keystart the deposit for first homebuyers is as low as two per cent of the purchase price.

Also, because Keystart also does not charge Lenders’ Mortgage Insurance, the total upfront costs are substantially lower than those charged by a traditional lender.

Last financial year, Keystart approved 2789 loans – 2169 of which were for construction or newly constructed homes however, with the price of established properties at an 8 year low more first home owner are expected to take that option in 2019. Source: REA