 Calls to double deposit
Keystart Loans has announced higher deposit requirements for first home buyers, from 2 per cent to 4 per cent.
The WA Government's discount home loan agency is responding to global economics and becoming stricter about deposits on low interest and low deposit home loans. Keystart CEO John Coles said the new deposit requirements only apply to new customers, and will take affect tomorrow.
"These increases are a responsible and necessary move designed to manage risk and ensure Western Australians are not over-extending themselves – particularly in times of rising unemployment and expected increases in official interest rates," Mr Coles said.
"Our new requirements still compare very favourably to banks currently requiring a 10 per cent deposit and a history of savings of at least 5 per cent of the value of the property."
A three month savings history will be needed by applicants and these savings must cover 2 per cent of the purchase price. Most banks and other lenders require a much bigger deposit, so Keystart is still a good option for many. But the group are asking for a stronger savings history in response to global financial situations.
This amounts to about $6400 for home buyers on the typical house price of $320,000.
Keystart's share of WA's first home owner market has seen a huge increase from 8 per cent to 30 per cent in the past year.
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