Keystart Home Loans WA: In With a 2% Deposit

What is Keystart?

Keystart is a lender set up by the WA State Government in 1989 to get Western Australians into home ownership sooner. It is not a bank and describes itself as not profit driven. Since 1989 it has helped over 118,000 Western Australians into a home. The pitch is simple: dramatically lower entry costs. A deposit of just 2%, no Lenders Mortgage Insurance, and no monthly account keeping fees.

The part most people miss is that Keystart is deliberately designed as a transitional lender. In its own words, it encourages you to refinance your home loan to another lender when you are ready. Keystart is a stepping stone: it gets you out of the rental market years earlier than a 20% deposit would, you build equity, then you move to a mainstream lender at a sharper rate. Its website even lists refinance offers from major banks to help borrowers leave.

The 2% deposit and what it really means

Keystart's minimum deposit is the higher of 2% of the purchase price or $2,000, and no LMI applies. To put that in perspective on a $500,000 Perth purchase:

Path	Deposit needed	LMI
Standard bank loan (20%)	$100,000	None
Bank loan with small deposit (5-10%)	$25,000 to $50,000	Typically thousands, unless a scheme covers it
First Home Guarantee (federal)	$25,000 (5%)	None (government guarantee)
Keystart Low Deposit Home Loan	$10,000 (2%)	None

That difference in entry cost is the whole reason Keystart exists. For a household paying Perth rents while trying to save, the gap between $10,000 and $25,000 (let alone $100,000) can be the difference between buying this year and renting for several more while prices keep moving.

You still need to cover stamp duty and settlement costs on top of the deposit, although first home buyer concessions soften that considerably. Our stamp duty WA guide covers the current thresholds.

To see the duty number for a specific purchase price, with the first home buyer concessions applied, use our WA stamp duty calculator. It takes about thirty seconds and tells you exactly what cash you need beyond the Keystart deposit.

Income limits and price caps

Keystart is targeted assistance, so unlike the federal guarantee scheme it has income limits. As at 16 July 2026 (keystart.com.au), the limits for the Low Deposit Home Loan are:

Location	Single	Couple or family
Perth metro and regional WA	$155,000	$228,000
Kimberley and Pilbara	$225,000	$285,000

The property price cap for the Low Deposit Home Loan is $860,000 as at the same date. Other Keystart products carry different caps and lower income limits, for example the Shared Ownership Home Loan ($128,000 single / $197,000 couple or family, price cap $720,000), where the Housing Authority co-owns a share of the property to shrink your loan.

Basic eligibility applies across the range: you must be 18 or over, an Australian citizen or permanent resident, a WA resident buying in WA, intend to live in the home, and not own other property at settlement. Keystart looks for stable income or regular employment of at least six months, and can accept some Centrelink benefits as income, which mainstream lenders often will not.

The trade-off: the interest rate

Here is the honest part that the display village sales office may not lead with. As at 16 July 2026, Keystart's standard variable rate is 7.85% per annum (comparison rate 7.94%). That sits meaningfully above sharp mainstream variable rates, and Keystart is upfront about the reason: in its own words, loans with lower interest rates often require a much larger deposit. Keystart sets its rates based on movements in the RBA cash rate.

This is why the transition matters so much. The Keystart rate is the price of entering with 2% down. Paying it forever is not the plan. The plan is: enter, build equity through repayments and market growth, then refinance to a mainstream lender the moment the numbers support it. Handled well, you get the early entry AND most of the cheaper long term rate. Handled badly (set and forget), the rate premium quietly compounds for years. That switch point review is exactly the kind of work a broker does for you, and Keystart actively encourages the move.

Keystart vs the First Home Guarantee

Most WA buyers with a small deposit should compare these two paths side by side before committing to either. They are run by different governments and solve the deposit problem differently:

	Keystart Low Deposit	First Home Guarantee
Run by	WA State Government lender	Federal scheme via mainstream lenders
Minimum deposit	2%	5%
LMI	None	None (government guarantee)
Interest rate	7.85% p.a. as at 16 July 2026	Market rates from participating lenders
Income limits	Yes ($155k single / $228k couple, metro)	None
Price cap	$860,000	$850,000 (Perth), $600,000 (other regional WA)
Who holds the loan	Keystart, until you refinance out	A mainstream lender from day one

The rough logic: if you can get to a 5% deposit within a reasonable time, the First Home Guarantee usually wins on total cost because you are on mainstream rates from day one. If the extra 3% of deposit would take years to save while the market moves away from you, Keystart's 2% entry can be worth far more than the rate premium costs. Income also decides it for some buyers: above Keystart's limits, the federal scheme is the only one of the two on the table.

Building new? Both paths stack with the WA First Home Owner Grant for eligible new builds, covered in our FHOG WA guide, and the full new build sequence is in our first home buyer house and land guide.

How to apply

Keystart takes applications directly, and it also accepts applications lodged through Keystart accredited brokers via its dedicated broker channel. Either way, the more valuable question usually comes before the application: is Keystart actually your best path in, or does the federal scheme, a guarantor structure, or simply a different lender's policy on your income type serve you better?

That is the conversation to have first. We compare the paths against your actual deposit, income and timeline, sequence the grants and concessions that apply, and if Keystart is the answer, we plan the exit refinance from day one so the rate premium stops the moment your equity allows. One conversation covers all of it.

Frequently asked questions