What is a Midkey No Monthly Payments Loan?

A Midkey No Monthly Payments Loan (called a 'Midkey loan') is different from any other kind of home loan or mortgage in Australia. Our borrowers do not make any regular, monthly payments. Instead, at the end of the loan, they pay the loan amount and simple interest (not compound interest), plus a new innovative Midkey Deferral Fee. There is no fixed repayment timeframe, but the loan must be repaid when you sell your home, move into aged care, die, or at other specific events agreed upfront.

How do I qualify for a Midkey No Monthly Payments Loan?

To qualify: Your home needs to be located in a state capital or major population centre in Australia (excluding NT and Victoria). You must have sufficient usable equity in your home: for an owner-occupied house, usable equity must be at least 20%; for an investment house or apartment, usable equity must be at least 25%. If you are securing your Midkey loan with a second mortgage, your first mortgage must be a traditional 'principal plus interest' home loan. You need to be an Australian citizen over the age of 18. All loans are subject to Midkey's approval.

How much can I borrow using a Midkey No Monthly Payments Loan?

A Midkey loan can be a minimum of $100,000. For owner-occupier houses: up to 35% of the agreed initial value if secured by a first mortgage, or up to 30% if secured by a second mortgage. The combined loan-to-value ratio cannot exceed 80%. For investment properties: up to 35% if first mortgage or 30% if second mortgage, with combined LVR not exceeding 75%. For apartments: up to 33% if first mortgage or 28% if second mortgage, with combined LVR not exceeding 75%.

What do I pay at the end of a Midkey No Monthly Payments Loan?

At the end of your Midkey loan, you'll pay: The original loan amount (principal); simple interest that has accumulated on your loan amount (typically 1-2% higher than traditional home loans); the Midkey Deferral Fee, which is a proportion of any increase in the agreed initial value of your home during the loan term; valuation fee if required (typically $300-$3,850); and a discharge fee of approximately $500.

How is a Midkey No Monthly Payments Loan different from a traditional home loan?

The main differences are: Timing of payments - no regular monthly payments required; assessment flexibility - we don't require you to prove ability to make regular repayments; simple interest instead of compound interest; no fixed repayment date - only repayable on certain events like selling your home; innovative Deferral Fee based on home value appreciation; and the ability to unlock home equity even if you don't meet traditional serviceability criteria.

If I have a Midkey No Monthly Payments Loan, who owns my home?

You do. In terms of property ownership and your use of your home, a Midkey No Monthly Payments Loan operates in a similar way to a traditional home loan.

No. Midkey is not a bank. We specialise in Midkey No Monthly Payments Loan for homeowners and would-be homeowners. We don't offer bank accounts, credit cards, or other products that banks typically do.

What is a Midkey Deferral Fee?

The Midkey Deferral Fee is the fee you pay at the end of your loan for the benefit of deferring all your principal and interest payments. You are only charged a Midkey Deferral Fee if the agreed initial value of your home increases. The fee is a proportion of any increase in the agreed initial value of your home during the loan term. For example, if your loan is 10% of your home's agreed initial value, your Deferral Fee will be 10% of any increase in value. If your home's value doesn't increase or decreases, you won't pay a Midkey Deferral Fee.

Home Equity Loan to Buy a Bigger Home

No monthly Payments

No fixed loan term

Simple interest not compounding

Upsize your home

Frequently asked questions about using Midkey to upsize your home.

Upsizing your home can be complicated

For many homeowners, upsizing is often constrained by an inability to secure a larger loan. You may need more space for a growing family, multigenerational living, a home office or changing lifestyle needs, but the cost of upgrading can make the next move difficult.

Lender serviceability requirements can limit how much you are able to borrow, even when you have built substantial equity in your current home. That can create pressure, uncertainty and missed opportunities.

Traditional finance options often rely on increasing your monthly payments. A larger mortgage may place additional pressure on household cash flow and make it harder to comfortably afford the home you need.

Create more flexibility for your next move

A Midkey No Monthly Payments Loan lets you unlock a portion of your home equity to help fund your next property purchase without adding new monthly payments. The funds can be used towards the purchase of a larger home, helping you make use of the home equity in your current property.

That means you can focus on finding the right home while keeping your finances flexible. It provides eligible homeowners with another way to help fund their next move while maintaining greater flexibility in their monthly budget.

The loan is repaid when you sell, refinance or choose the timing that's right for you^. Midkey can be structured as a first or second mortgage, depending on your circumstances^{^}.

^ Repayment triggers for your Midkey loan are included in your contract. The loan will need to be repaid if you default, if you increase your priority mortgage, if the LVR of your property exceeds 100%, if you move into an aged care, or if you die.

Trusted by borrowers
across Australia

Hear from Australians who made the Midkey move. Check out our latest reviews.

“The birth of your product has, without debt, given me a new lease on life and opportunity for myself and my kids. I can pay the school fees, renovate the way I want to, and see the house to pay back the loan.”

Cheryl (52)

Coogee

“By using my Midkey to pay off some of my existing mortgage, I have reduced the monthly payments by more than 50% so now I feel less constrained, freer.”

Mark (37)

Kellyville

“My only other option was to sell and downsize, but I hadn’t planned to do that for another five to ten years. Without Midkey I would have lost my life as it was.”

Dianna (68)

Mittagong

“I admit I was sceptical at first, but then I looked online and did my research to understand the model, and it made sense.”

Glenn (48)

North Epping

“Our dream of giving our eldest daughter a lump sum towards her deposit has come true. Instead of buying a one-bedroom apartment, now she can buy a three-bedroom house in a better suburb.”

Elizabeth (60)

Brisbane

Why Midkey is different

Traditional Home Mortgage

Reverse Mortgage

Unregulated Loans

Bridging
Loans

No monthly payments

Looks at more than just your income

Long/no loan term

Available in addition to an existing mortgage

Welcomes a broad range of borrowers (18+)

Simple* accruing interest

Cheaper loan option

*Click here to learn more about ‘simple vs compounding’ interest.

Availability depends on lender and loan terms.

Frequently asked questions

Take a look at the most commonly asked questions.

At the end of your Midkey No Monthly Payments Loan – typically when you sell your home or choose to repay – you’ll pay:

The original loan amount (principal): This is the amount you borrowed at the start of your Midkey loan.
Simple interest that has accumulated on your loan amount. Midkey charges simple interest (not compounding), which means interest is calculated only on your original loan amount – not on any interest that’s already accrued. For example, interest that builds up this year won’t generate more interest next year.

The rate is typically 1-2% higher than a traditional home loan, but lower than reverse mortgage or typical second mortgage rates.
It’s a variable rate, linked to the Reserve Bank of Australia’s cash rate:
- Owner-occupiers: RBA + 3.25%
- Investment houses: RBA + 3.75%
- Apartments: RBA + 4.25%

The Midkey Deferral Fee: This is a proportion of any increase in the agreed initial value* of your home during the loan term. The proportion is agreed upfront and calculated by dividing your Midkey loan amount by your home’s agreed initial value. We refer to this proportion as the deferred payments percentage.

Making partial repayments during your Midkey loan term will reduce the deferred payments percentage that determines your Midkey Deferral Fee. If no partial repayments are made, the original deferred payments percentage (agreed at the start of your loan) will stay the same.

Below are two examples of how a Midkey Deferral Fee is calculated:

If, at the start of your Midkey loan, the amount of your Midkey loan was 10% of your home’s agreed initial value, your Midkey Deferral Fee will be 10% of any increase in your home’s value over the agreed initial value during the term of your loan.
If, at the start of your Midkey loan, the amount of your Midkey loan was 20% of your home’s agreed initial value, your Midkey Deferral Fee will be 20% of any increase in your home’s value over the agreed initial value during the term of your loan.

If, at the end of your Midkey loan, the agreed initial value of your home has not increased or has decreased, you will not pay a Midkey Deferral Fee.

*For every Midkey loan, we apply a minimum 5% reduction to your home’s initial independent valuation. This adjusted figure is called the agreed initial value. We apply this reduction because the economics of Midkey’s No Monthly Payments Loan are designed primarily for long-term borrowers. However, we understand that some borrowers may need short-term solutions too. By using the agreed initial value, Midkey can responsibly offer loans to both short-term and long-term borrowers – while keeping our model fair and sustainable for everyone.

Valuation fee (if required)

A final independent valuation may be needed. This fee is paid directly to an independent valuer, typically $300-$3,850 (quotes required for homes valued over $10 million)

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Discharge fee: Approximately $500

Note: There are no regular or monthly fees charged during the term of your Midkey loan. However, if certain events occur during the term of your loan (for example, if you want to make a partial repayment of your Midkey loan or you need to make a partial repayment because the loan to value ratio that applies to your home is greater than 100%), you may need to pay some additional fees (like partial repayment fees, valuation fees, processing fees, third party fees, and other incidental fees).

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The main differences are:

Timing of payments: Traditional home loans require principal and interest payments monthly. Midkey loans have no regular monthly payments; all principal and interest can be repaid at the end of the loan.

Assessment flexibility: Traditional lenders assess your ability to make regular loan repayments by reviewing your income, expenses, and assets. While Midkey considers similar factors for any of your priority debts, we don’t require you to prove your ability to make regular or monthly repayments on our loans.

Unlocking home equity: Due to our assessment flexibility, even if you don’t meet traditional serviceability criteria, you may still qualify for a Midkey loan and unlock your usable home equity to increase your borrowing capacity.
Reduce your monthly debt payments: If you want to reduce your monthly debt payments, you can use a Midkey loan to decrease the amount of your traditional home loan.
Simple interest: A Midkey loan charges simple interest (not compound interest). Simple interest means that interest is calculated only on the original loan amount, not on accumulated interest. Our simple interest rate is roughly 1% to 2% higher than a traditional home loan.
Repayment date: A traditional home loan typically specifies a date by which you must repay your loan, whereas a Midkey loan is only repayable on certain events, like if you sell your home, you decide you want to repay, move into aged care, or you die.
Innovative Deferral Fee: The Midkey loan has a new, innovative Midkey Deferral Fee that is a proportion of any increase in the agreed initial value* of your home during the loan term. The proportion is agreed upfront and calculated by dividing your Midkey loan amount by your home’s agreed initial value. We refer to this proportion as the deferred payments percentage.

Below are two Midkey Deferral Fee examples:

If, at the start of your Midkey loan, the amount of your Midkey loan was 10% of your home’s agreed initial value, your Midkey Deferral Fee will be 10% of any increase in your home’s value over the agreed initial value during the term of your loan.
If at the start of your Midkey loan, the amount of your Midkey loan was 20% of your home’s agreed initial value, your Midkey Deferral Fee will be 20% of any increase in your home’s value over the agreed initial value during the term of your loan.

If, at the end of your Midkey loan, the agreed initial value of your home has not increased or has decreased, you will not pay a Midkey Deferral Fee.

*For every Midkey loan, we apply a minimum 5% reduction to your home’s initial independent valuation. This adjusted figure is called the agreed initial value. We apply this reduction because the economics of Midkey’s No Monthly Payments Loan are designed primarily for long-term borrowers. However, we understand that some borrowers may need short-term solutions too. By using the agreed initial value, Midkey can responsibly offer loans to both short-term and long-term borrowers – while keeping our model fair and sustainable for everyone.

Note: Other differences include establishment fees, valuation and documentation costs, a settlement rescheduling fee, and specific eligibility criteria.

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Think of the Midkey Deferral Fee as "the fee you pay at the end of your loan for the benefit of deferring all your principal and interest payments”. Importantly, you are only charged a Midkey Deferral Fee if the agreed initial value of your home increases.

‍How it Works:

The Midkey Deferral Fee is a proportion of any increase in the agreed initial value* of your home during the term of your Midkey loan. The proportion is agreed at the start of your Midkey loan and is calculated by dividing your Midkey loan amount by your home’s agreed initial value**. We refer to this proportion as the deferred payments percentage.
For example:

If your Midkey loan is 10% of your home’s agreed initial value at the start of your Midkey loan, your Deferral Fee will be 10% of any increase in your home's agreed initial value.

If your Midkey loan is 20% of your home’s agreed initial value at the start of your Midkey loan, your Deferral Fee will be 20% of any increase in your home's agreed initial value.

No increase in the agreed initial value of your home? No Midkey Deferral Fee. If, at the end of your loan, the agreed initial value of your home hasn’t gone up – or even if it has gone down – you won’t pay a Midkey Deferral Fee. But, for your sake and ours, we hope the value of your home appreciates through the roof, so we can all celebrate at the end. We love a win/win arrangement, and we hope you do too.
Making partial repayments during your loan term will reduce the deferred payments percentage that determines your Midkey Deferral Fee. If no partial repayments are made, the original deferred payments percentage (agreed at the start of your loan) will stay the same.

‍We designed the Midkey No Monthly Payments Loan to be fair, flexible, and performance-based. If your home does well, we share in the upside. If it doesn’t, you don’t need to pay a Deferral Fee

*For every Midkey loan, we apply a minimum 5% reduction to your home’s initial independent valuation. This adjusted figure is called the agreed initial value, and it forms the basis for calculating your usable equity. We apply this reduction because the economics of Midkey’s No Monthly Payments Loan are designed primarily for long-term borrowers. However, we understand that some borrowers may need short-term solutions too. By using the agreed initial value, Midkey can responsibly offer loans to both short-term and long-term borrowers – while keeping our model fair and sustainable for everyone.

Calculate how much you can unlock here.

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Learn more in FAQs

Midkey interest rates

Midkey’s No Monthly Payments Loan uses simple interest, not compound interest. That means interest is calculated only on your original loan amount – not on any interest that’s already accrued.

Interest details

1. Midkey’s simple interest rates are set at a margin above the RBA cash rate. Midkey’s interest rates typically change soon after the RBA cash rate changes.

2. Comparison rates are calculated based on a secured loan amount of $150,000 over a 25-year term. Warning: Comparison rates are true only for the example given and do not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rate does not include the Midkey Deferral Fee and may not include other fees. For example, if your home is an owner-occupied house with simple interest charged at the rate of 7.10% p.a. and the value of the home increases by 6% per year each year over 25 years above the Agreed Initial Value, then if the Deferral Fee is included in the calculation of the comparison rate, the comparison rate will be 7.78% p.a. To fully understand the cost impacts of the Deferral Fee on your Midkey loan, we suggest you refer to our calculator.

Simple Interest Online

Comparision Rate

Owner-occupier house

7.6% p.a.

5.96% p.a.

Investment house

8.10% p.a.

6.09% p.a.

Apartment

8.60% p.a.

6.21% p.a.

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