Frequently asked questions

Take a look at the most commonly
asked questions. We’ll help you get the answers you need.

The main differences are:

• Timing of payments: A traditional home loan typically requires principal and interest payments on a monthly basis. In contrast, with a Midkey home loan, there are no regular, monthly payments, as they are paid at the end of the loan.

• Assessment flexibility: Traditional lenders are more sensitive to our ability to service their debt. They are required to assess your income, expenses, and assets to determine your ability to make regular payments. Although Midkey assesses similar criteria, we don’t need to determine your ability to make regular, monthly payments on our loans.

• Unlocking home equity: Due to our assessment flexibility, even if you can’t meet the serviceability requirements of a traditional lender, you may still be able to unlock the useable equity in your home with a Midkey home loan to increase your borrowing capacity.

• Reduce your monthly debt payments: If you want to reduce your monthly debt payments, you can use a Midkey home loan to decrease the amount of your traditional home loan.

• Simple interest: A Midkey home loan charges simple interest (not compound interest). Simple interest does not compound, i.e. the interest that has accumulated this year is not charged interest next year. The simple interest rate is roughly 1% to 2% higher than a traditional home loan. Midkey charges variable simple interest that is a 3.25% premium to the RBA Cash Rate.

• Repayment date: A traditional home loan typically specifies a date by which you must repay your loan, whereas a Midkey doesn’t. A Midkey home loan is only repayable on certain events, like if you sell your property or you decide you want to repay.

• Innovative fee: It has a new, innovative Midkey Deferral Fee that is a proportion of any increase in your home’s value, where the agreed proportion is your Midkey home loan amount to your home’s value at the start of your loan. For example, if your Midkey home loan is 10% of your home’s value at the start of the loan, your Midkey Deferral Fee at the end of the loan will be 10% of any increase in your property's value; if your Midkey home loan at the start is 20% of your home’s value, then your Midkey Deferral Fee will be 20% of any increase in its value at the end of the loan. If your property does not go up in value or in fact, it decreases, you will not pay the Midkey Deferral Fee.

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Note: There are other differences, such as the amount of the establishment fee, transaction-related costs (eg. valuation fees, documentation preparation costs and out-of-pocket expenses), a settlement rescheduling fee, and eligibility criteria.

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