Redraw and deferring payments
When thinking about how to budget for your home loan, it is important to understand your loan repayments and how they might be able benefit you in the future.
How you choose to make your repayments can have a big impact on the overall cost of your home loan.
How your payments are calculated
As a Keystart client, you will have opted to make your repayments weekly, fortnightly or monthly to meet your minimum monthly repayment.
We calculate weekly and fortnightly repayments based on your minimum monthly repayment.
For a minimum monthly repayment of $1,200
Weekly repayments would be $1,200 ÷ 4 = $300
Fortnightly repayments would be $1,200 ÷ 2 = $600
Note: other lenders may calculate weekly payments differently (eg, yearly payment ÷ 52)
Paying more than your minimum repayment amount puts you into what we call an advance position. If you continue to pay more than your minimum repayment amount, you will build up your advance position over time. This will help you become debt free faster and reduce your monthly interest charges. It may also assist you in getting into a good position to refinance to another lender.
You can read more on our blog post Three reasons to aim for an advance position
Keystart does not charge fees for making additional payments or paying out your home loan early. We will need 24-48 hours’ notice if you need to make changes to your scheduled repayments.
Want to make additional payments?
You do not have to make any additional payments but if you decide this is the right option for you and your home loan, you can contact us or make changes to your direct debit payments via your Client Portal.
You can also make once-off payments via BPay whenever you wish. BPay payments can be made to Keystart via online banking or at any Australia Post outlet. If you do not have your Keystart BPay card available, contact us to assist you.
Want to change your payment frequency?
By making more frequent loan repayments, you’re decreasing the size of your loan more often, lowering the amount of interest owed. The difference might not seem very obvious in the short term but over the course of your loan, you could save thousands of dollars. Read more on how your payment frequency can affect your home loan on our blog
If your repayments are scheduled on a date that does not suit you, we may also be able to change this to a more convenient date. This is dependent on when your minimum monthly repayment is due and your available advance position. Please contact us to see if we can assist you with this.
Please note we cannot change the date when your minimum monthly payment is due by.
Want to use your advance position? You may be able to defer payments
If you are in advance of your scheduled payments you may be able to defer or reduce a loan repayment if needed. This can help you manage any unexpected expenses.
To find out more about this facility, you can give us a call at a time that suits you. Keystart can assess the current status of your advance position to see if you are able to benefit from this.
Keystart need 24-48 hours’ notice to make these changes to a scheduled repayment.
You can keep an eye on your account and available advance position through your Client Portal.
Want to use your advance position in other ways? You may be able to redraw
At Keystart we do things a little differently to other lenders. Unlike other mortgage lenders, we do not have an offset account facility available to our customers. However, Keystart do provide an alternative service called a redraw.
If you are paying above your minimum monthly payments consistently, your advance position will build up over time and you may be able to arrange a redraw.
When assessing whether a redraw is suitable for customers we do a review of your loan situation, including assessing any changes in your income and any other debts outside of your Keystart Home Loan. The amount you may be eligible to redraw will be based on this review.
When considering a redraw, you need to decide whether this is the right option for you. Redrawing funds from your advance position may increase your minimum monthly payments to ensure the loan is paid in full by the end of your loan term.
Our redraw facility is not available to Shared Equity clients.
Unable to make a payment?
At Keystart we understand life can take unexpected turns and situations change. If you are concerned about your situation or your ability to make any of your scheduled repayments, please contact us as soon as possible to discuss your options.
If you are seeking the assistance of a Financial Counsellor you can contact the Financial Counsellors Association of WA on 1800 007 007 or head to their website Financial Counsellors Association of Western Australia
Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs.