- Changes to Keystart's interest rate policy
provides relief for many WA families
- Keystart customers to receive a reduction in
interest rates of almost one per cent providing savings of almost $3,000 per
year for the average loan
- Rate reduction to benefit more than 14,000
Western Australian homeowners, along with future homeowners
- New interest rate effective from 1 July 2023
Major
changes have been announced to reform Keystart's interest rate setting policy, which
will provide interest cost savings supporting thousands of Western Australian
homeowners from 1 July this year.
Following
an extensive review, the new policy has been designed to better service
customers while still responsibly managing Keystart's risks as a low deposit
home loan provider.
Keystart
will now set its rates based on the movements of the Reserve Bank of
Australia's (RBA's) official cash rate plus a fixed margin of 350 basis points.
This means there will be a reduction in Keystart's variable interest rates of
almost one per cent.
Under
Keystart's previous policy, its interest rate would have increased to 8.51 per
cent following the RBA's rate rise in June. Instead, the interest rate
payable will be 7.60 per cent.
For the
average Keystart customer with a $390,000 30-year loan, the rate reduction
means an annual savings of almost $3,000.
As
a transitional lender, Keystart exists to enable more Western Australians to
get into the housing market and provides options to flexibly transition out of
Keystart or make other arrangements.
Keystart
is unique in the home loan market, with deposits as low as two per cent and no
lender's mortgage insurance, potentially saving homeowners tens of thousands of
dollars.
Previously,
Keystart has calculated its rates using the average of the standard variable
interest rate of the four major lenders, ANZ, CBA, NAB and Westpac.
Comments attributed to Premier Roger Cook:
"Western
Australia remains the second most affordable State or Territory to purchase a
home in, and changes to Keystart's interest rate setting policy ensures
Keystart's rate is no longer linked to the decisions of the big four banks.
"The
changes to Keystart's interest rate
policy will assist more Western Australians into affordable home ownership.
"Under the changes, existing customers will also
benefit from a reduction in interest rates, providing cost-of-living
relief for many Western Australian families."
Comments attributed to Housing Minister
John Carey:
"As Housing Minister, I'm deeply aware of the
current housing market across the country and its impacts on many Western
Australians.
"The
new interest rate policy for
Keystart follows an extensive review and has been designed to better serve customer's
interests, while still responsibly managing Keystart's risk for its low
deposit home loans.
"Our Government is using every lever we can to bolster the supply
of housing throughout Western Australia – including apartment developments
through our significant planning reforms, 100 per cent stamp duty concessions
and a range of changes to Keystart loans.
"Keystart has supported more than 120,000 Western Australians to achieve
their home ownership goals since it was established in 1989."
