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Got a plan for your home loan?

When you started thinking about owning your own home, you made the decision to go with Keystart with our low deposit requirement – and you probably didn't want to pay lender's mortgage insurance. Well done – that decision get you started on your home ownership journey. 

Like many big decisions in life, your home loan finance needs a wellbeing check-in every now and then. You might find it helpful to track how your home loan is going – and to make a plan for the next five to ten years.

Are you ready to leave us?

We know this sounds strange, but we're happy for you to move on – when you're ready to do so. We're here to help you get started. We're a transitional lender so we encourage our customers to leave us when it's suitable for you. If you have equity in your home, you may be able to refinance. You might be able to get a better deal with a new lender.

What is equity (…and why it needs to be part of your plan)

Equity is the difference between the value of your home and the amount you owe on it. The amount of equity you have in your home may affect the options you have to refinance with another lender. 

Lenders will look at your loan to value ratio (LVR). If your LVR is high, for example, if your loan amount is more than 80% of your property value, your new lender may require lender's mortgage insurance to offset their risk. This will be an additional cost for you to incur. 

Some home loan products are only available if your LRR is below a certain percentage, for example, you may see loan products available for 80 LVR. This means the loan is available if your loan is less than 80% of the value of your home. 

You can make a plan to increase your equity

There are two ways to build equity in your home. Your equity increases:

  1. as you pay off your home loan, or
  2. if the value of your home increases.

You can make a plan to pay off more of your loan by paying more than your minimum repayments,  changing the frequency of your payments, making additional one off payments – there are lots of options here. 

Find out how big an impact these will have on your loan with our home loan repayment calculator.

Try out our repayment calculator

Get in touch if you want to increase your direct debit payments via email customer@keystart.com.au or call us on 1300 578 278.

Check the value of your home

While you can't impact the property market, you can take steps to be aware of the value of your home. You can keep an eye on real estate websites or ask for a real estate valuation from a real estate agent to keep across any increase in value in your home.

Check your loan to value ratio

Lenders will look at your loan to value ratio (LVR) if you want to refinance with them. You can get an idea of your LVR by doing some simple calculations on a piece of paper. 

  1. Write down the amount you currently owe. You can find this in the customer portal – or give us a call.
  2. Get an idea of how much your home may be currently worth. Write this figure down.
  3. Divide figure 1 by figure 2 – and then times that number by 100. This is your loan to value ratio – or LVR, as a percentage.

If your calculation comes to less than 80%, you might be ready to refinance. If it is higher, then you'll need to wait until your loan amount is reduced. 

If your ratio is higher than 80%, you might find it helpful to set a timeframe. How much more do you need to pay off your loan to get the LVR closer to 80%? Can you afford to pay any more than your minimum repayments? This may help you improve your LVR.

Set your timeframe

It may take time to build up enough equity to refinance. Making a plan to work towards a timeframe puts you in control of your home loan. 

Are you ready to look into refinancing options?

If you want to refinance to another lender, you'll need to pick the lender and loan product that is right for you. We'll need this information to arrange your refinancing. 

We can't help you select another lender but there is a lot of help out there. Did you know some lenders have refinancing offers available for Keystart customers? You may find it helpful to contact a broker to look into your options. 

We recommend that you seek your own independent financial advice prior to making any decisions about your financial needs.