Keystart has lifted its property price limits across WA, which means more Perth homes now fit under the cap for its low-deposit loans. If you earn a regular income but have struggled to save a 10-20% deposit, this change widens the suburbs and price brackets you can look at. Call 0489 082 257 to check your position.
What changed with Keystart's price limits
REIWA reported this week that Keystart has increased its property price limits across WA. For anyone who has sat in my office in Osborne Park and watched the Perth market run away from their Keystart cap, this is welcome news. The limits had become a real handbrake.
Keystart is the WA government's home loan lender. It exists for people who can service a mortgage but cannot get over the deposit hurdle with a mainstream bank. The catch has always been two sets of caps: an income limit and a property price limit. When Perth prices rose quickly, the price cap started excluding ordinary suburbs that used to be within reach.
The exact new limits depend on where you are buying. Keystart sets different caps for the Perth metro area, Peel and regional WA. I am not going to quote figures here because they get revised and I do not want you relying on a stale number. Check the current limits at keystart.com.au before you start shortlisting homes.
What I can tell you is the direction. Caps went up, not down, and the gap between the Keystart limit and what a typical house actually costs in the outer suburbs has narrowed. That matters because the whole point of Keystart is to get first home buyers and lower-deposit buyers into real homes, not just theoretical ones.
Why the old limits were hurting Perth buyers
Here is the practical problem we kept hitting over the last couple of years. A couple would come in with a 2% deposit, solid jobs and clean credit. Keystart would approve them in principle. Then they would go house hunting in Baldivis, Ellenbrook or Byford and find that most three-bedroom homes had drifted above the cap.
Perth's median house price moved a long way in a short time. REIWA publishes the latest suburb and metro figures at reiwa.com.au, and anyone who has tracked them will know the market did not wait for government policy to catch up. Buyers were being pushed further out, into smaller homes, or back onto the rental treadmill.
Some clients tried to work around it by looking at house and land packages, where Keystart's construction loans are a genuinely good product. Others gave up and tried to save a bigger deposit for a bank loan, which in a rising market is a bit like running up a down escalator. The limit increase gives both groups more room.
What it means for you as a Perth borrower
First, more established homes are back in play. If you were only looking at new builds because established homes in your preferred suburb blew past the old cap, revisit that search. Suburbs along the Armadale line, the northern corridor around Butler and Alkimos, and pockets of the south-east around Byford may now sit within reach.
Second, your deposit requirement does not change just because the cap went up. Keystart's metro loans still start at a 2% deposit, with slightly different rules for regional areas. On a higher purchase price that 2% is a larger dollar figure, so budget for it. A $600-650k home needs roughly $12-13k as a minimum deposit before other costs.
Third, the income limits still apply. A higher price cap does not help if your household income sits above the Keystart threshold. Those thresholds vary by household type and location, and again I will point you to the Keystart site rather than quote a number that might be outdated by the time you read this.
Fourth, and this is where a lot of people get caught, Keystart's interest rate is usually higher than the sharpest rates from mainstream lenders. That is the trade-off for no lender's mortgage insurance and a tiny deposit. The smart play is often to use Keystart to get in, build equity, then refinance to a bank once you have around 20% equity.
Fifth, the WA first home owner grant and stamp duty concessions still sit alongside Keystart. These can shave a meaningful amount off your upfront costs on a new build or a lower-priced established home. The rules and thresholds are published by the WA government at wa.gov.au, and we check them for every first home buyer file we run.
Worked example: Jess and Marcus in Butler
Let me walk you through a client profile that looks like a dozen couples we have helped. Jess is a registered nurse at Joondalup Health Campus, Marcus is a diesel mechanic working FIFO on a two-and-one swing. Combined household income sits in the $140-160k range. They rent in Butler and have been saving for about three years.
Their savings are around $35-40k. That sounds decent until you price a bank loan. Most mainstream lenders want 5% minimum, plus lender's mortgage insurance that can run into the tens of thousands on a low-deposit loan, plus stamp duty, plus settlement costs. On a $650k home their savings would have been swallowed and they still would not have hit a comfortable deposit.
Under Keystart, the picture changes. A 2% deposit on a $620-650k purchase is roughly $12-13k. There is no lender's mortgage insurance. If they buy an established home they may qualify for a first home buyer stamp duty concession depending on the price, and if they build they could be eligible for the first home owner grant on top. Their $35-40k now covers the deposit, legal fees, building and pest inspection, and a buffer.
Twelve months ago, under the old price limits, several of the homes they liked in Butler and Alkimos were sitting above the Keystart cap. With the increase, those homes are back on their list. Their repayments on a Keystart loan will be higher than on a sharp bank rate, so we modelled that honestly and they decided a couple of extra hundred dollars a month was worth getting off the rental cycle.
The plan we built with them has a second stage. In two to four years, once their loan balance has dropped and the home has hopefully grown in value, we will reassess. If their equity has reached around 20%, we look at refinancing to one of the 30+ lenders we compare, which could drop their rate and save them real money over the life of the loan.
How a Central Lending Solutions broker helps
Keystart is a strong option for the right person, but it is not the only option, and it is not always the best one. Our job is to put it side by side with what a bank, a credit union and a non-bank lender would offer you, then tell you straight which one suits your situation and your five-year plan.
We have been doing this from 129 Hasler Road, Osborne Park since 2015. The team, including Harj, Aoife, Keeley, Jono and Jonny, has settled more than $1.2 billion in loans and we have 311+ five-star Google reviews from people who sat where you are sitting now. We are MFAA members and hold ACL 497 950.
Here is what the process looks like when you come to us about Keystart:
- We check your income against the current Keystart thresholds and your target suburbs against the new price limits. No point falling in love with a house that will not pass.
- We run your borrowing capacity across Keystart and a handful of mainstream lenders, so you see the real comparison in dollars and repayments.
- We map out your upfront costs, including deposit, stamp duty, grants, legal fees and a buffer, so there are no nasty surprises at settlement.
- We lodge the application, manage the paperwork and chase the lender so you can keep going to work and inspections.
- We set a reminder to review your loan down the track, because getting in is only half the job.
One thing we are honest about. Keystart assessments can take longer than some people expect, and the lender has specific requirements around genuine savings, employment history and the property itself. We know what they look for and we prepare your file accordingly. It is the difference between a smooth approval and three weeks of back and forth.
If you have been told you need to save another $40k before anyone will talk to you, that advice may be out of date. The Keystart limit increase has changed the maths for a lot of Perth households. Let us check yours.
Frequently asked questions
What are the new Keystart property price limits for Perth?
The limits differ between Perth metro, Peel and regional WA, and they were increased recently as REIWA reported. Because the figures can be revised, I would rather you check the current numbers directly at keystart.com.au than rely on a figure in an article. We confirm the live limit on every Keystart file we lodge.
Do I still only need a 2% deposit with Keystart?
Yes, for most Perth metro purchases Keystart's minimum deposit remains around 2% of the purchase price. Regional loans can require a little more. A higher price cap means that 2% is a bigger dollar amount than before, so on a $600-650k home you are looking at roughly $12-13k as your minimum deposit, before other costs.
Is Keystart's interest rate higher than a bank's?
Usually, yes. Keystart's rate tends to sit above the sharpest owner-occupier rates from mainstream lenders. In exchange you avoid lender's mortgage insurance and get in with a small deposit. Many of our clients use Keystart to buy, then refinance to a mainstream lender once they build up around 20% equity.
Can I use Keystart to buy an established home or only a new build?
Both. Keystart offers loans for established homes as well as construction loans for house and land packages. The property just needs to sit under the relevant price limit and meet Keystart's property requirements. The recent limit increase mainly helps buyers of established homes in outer Perth suburbs where prices had drifted above the old cap.
What income limits apply to Keystart loans?
Keystart sets maximum household income thresholds that vary depending on whether you are single, a couple, or have dependants, and whether you are buying in metro or regional WA. These limits are separate from the property price limits. If your income sits above the threshold, we would look at mainstream lenders with low-deposit options instead.
How do I find out if I qualify after the limit increase?
The quickest way is a fifteen-minute chat. Bring a rough idea of your income, savings and preferred suburbs. We will check you against both the income and price limits, compare Keystart with a few other lenders, and tell you plainly where you stand. Call Dave or the team on 0489 082 257, or book a free chat at centrallendingsolutions.com.au/contact.
