Need a Second Mortgage? Here’s a Smarter Way to Borrow

Money-minded Australians know that a second mortgage can create more opportunities than problems during your busy mid-life.

Of course, they must be managed correctly. And when they are, this type of home equity loan enables you to act on a wide range of financial decisions. You can finance home renovations with a second mortgage that can improve your lifestyle and grow the value of your property. 

Maybe you want to consolidate existing debt to reduce monthly repayment obligations and improve your cashflow – you can do this too. You could find yourself approaching major life expenses, like purchasing a bigger property, managing several years of private school fees, or wanting to help your adult children make their first property move. 

No matter your reason for needing extra capital, a Midkey no monthly payments loan is a revolutionary new second mortgage option for asset-rich mid-life Australians facing serviceability issues with traditional lenders. 

Discover more about second mortgages, the changing sentiment surrounding them, as well as how you can use your home equity to achieve more financial freedom.

Why some Australians hesitate to take on a second mortgage

Financial literacy levels in Australia have risen rapidly since the advent of second mortgages in the 1970s. While some people view second mortgages as a ‘last resort’, in reality, a well-structured equity release loan can be a smart, proactive step when undertaken responsibly. 

That said, some apprehensions remain, and below are some of the common concerns:

• You might be unsure how a second mortgage works, be worried about losing control of your home, or taking on unmanageable risk
• You might have tried to obtain a second mortgage from your current bank or another traditional lender, however you were knocked-back due to their strict income testing (even if you have significant equity in your property)
• Monthly repayment pressure from standard loans can add another repayment to your budget, impacting your cash flow
• You might be concerned about the increased cost of borrowing due to second mortgages carrying higher interest rates

Why a Midkey no monthly payments loan is different

Midkey has modernised the Australian lending market by pioneering a no monthly payments home equity loan that can work as either a first or second mortgage. 

If you have an existing mortgage, you can access up to 30 per cent of your home’s value through Midkey, or up to 35 per cent if you do not currently have a home loan.

Instead of only looking at your income, Midkey lets you borrow based on the value of your home. That means fewer roadblocks and more options for Australians who have plenty of equity in their property, but do not always fit the traditional lenders’ strict rules.

Here is why mid-life Australians are increasingly choosing Midkey for home equity loans:

• It opens the door for Australians who do not meet normal serviceability criteria, especially those with irregular incomes, or people planning for semi-retirement
• The lending model prioritises the wealth you have built in your home, not just your payslips
• The no monthly payments model frees up your cash flow, allowing you to reduce your debt payments or focus on other financial priorities
• Our Australian-based team provides one-on-one support that consistently earns us five-star Trustpilot reviews

A Midkey second mortgage loan is designed to give responsible homeowners a trusted partner when traditional lenders say no.

When a second mortgage makes sense

A Midkey home equity loan can be used for a wide range of real-life scenarios. 

You might be planning to:

• Fund renovations that improve lifestyle or boost your home’s future value
• Help your children buy their first home or a better home
• Fund education, such as private school fees
• Start or fund a business, or bridge the gap during a career change
• Supplement the loss of income during maternity or paternity leave
• Take that trip of a lifetime you have been thinking about for years

Midkey borrower Chris, a media and advertising executive living in Mosman (NSW), used his second mortgage to setup a private school fund for his five children.

Unable to borrow against the home equity he and his wife had built repaying their existing mortgage, and not wanting to sell shares or ask for a loan from family members, Chris turned to Midkey for a “supplementary loan”.

After an Eligibility Check and submitting his application, Chris obtained capital swiftly through Midkey allowing him to pay the school fees and improving his financial peace of mind, while also lowering repayments on his primary mortgage and his stress levels.

You can watch Chris’ story here.

Midkey fees and other considerations

There are many factors to take into account when considering a Midkey no monthly payments loan, which we encourage you to discuss with your financial advisor.  Perhaps most importantly are the associated costs of our lending product. 

With a Midkey loan, you do not make any monthly payments. Instead, you choose when to repay the funds in full, and that is typically when you sell or refinance your property.

During the life of the loan, simple interest accrues on the borrowed amount. And when you repay the principal loan and all the accumulated interest, you will also pay a Deferral Fee that is based on a portion of your home's increase in value.

If your property’s value does not go up over the loan term, you do not pay the Deferral Fee –lowering your total repayments. If you are a financially-savvy homeowner with a strong credit history and you have the desire to access equity without selling your home, Midkey offers a smart way to achieve your goals.

Curious about how much equity you could unlock? Try our Loan Calculator or book a free consultation with our team today.