What is the Shared Ownership Home Loan scheme in Western Australia?

If you're struggling to save a deposit for a home in Western Australia, a Shared Ownership Home Loan through Keystart may help you get into your house faster with as little as a two per cent deposit and no Lender’s Mortgage Insurance (LMI). The scheme was rolled out by the West Australian government to help more people purchase a home in an affordable manner without having to wait to save a 20 per cent deposit.

A Shared Ownership Loan is advanced through Keystart, the government's lending agency in Western Australia. Under this scheme, Western Australia's Housing Authority funds up to 30 per cent of the purchase price of your home if you’re a first home buyer. This helps you get into your home sooner without waiting to save up a large deposit.

In return for paying a portion of the purchase price, the Housing Authority co-owns a part of the property with you. You only need to repay your share of the mortgage, and not the part funded by the Housing Authority. However, the general maintenance of your home, including insurance premiums and any strata levies, must be paid by you. These expenses are not shared by the Housing Authority.

If you are worried about sharing ownership of your living space, it’s worth remembering that joint ownership doesn't limit your right to use the property. Even though the Housing Authority owns a percentage of the property, it is your home.

However, if you wish to own the home outright, the Housing Authority may allow you to increase your share in the property, depending on your loan type and the area where you are purchasing.

Benefits of a Shared Home Ownership Loan

• You can purchase your first home with a deposit of only $2,000 or two per cent of the purchase price, whichever is greater.
• You don’t need to demonstrate any genuine savings towards your deposit.
• You don’t have to pay for Lender's Mortgage Insurance.
• As the Housing Authority owns the house with you, your overall borrowing is reduced despite a low deposit. Consequently, your monthly repayments may be relatively smaller and easier to manage.
• Keystart doesn’t charge you any monthly account-keeping fee.

Types of Shared Ownership Loans

You can use a Shared Home Ownership Loan to purchase both newly built homes and off-the-plan properties offered by the Western Australian Housing Authority across the metropolitan and regional areas. However, the type of Shared Ownership Loan you’re eligible for will depend upon your requirements and where you're buying in the state.

A flexible Shared Ownership Home Loan gives you the option of increasing your share in the property by refinancing with a traditional lender, or purchasing more shares in your property, whenever your financial position allows.

A fixed Shared Ownership Loan, on the other hand, doesn't allow you to buy any further shares in your home or refinance with another lender. If, at any time, you decide to sell the property, it may only be sold to the Housing Authority for the valuation price. 

It's worth noting that you'll never own your home outright when you opt for a fixed Shared Ownership Home Loan. However, any increase in the property's value will increase your equity, which could help you if you decide to sell the property and use the proceeds to purchase another home for yourself. You also won’t need to spend any time finding a buyer as the Housing Authority will be there to buy your house at the valuation price.

Such loans are only available on a few properties in select locations in the Perth Metro Area. This option is provided to help the Housing Authority retain properties in key locations in Perth to maintain housing affordability. You can visit the Opening Doors website to find properties eligible for fixed Shared Ownership Loans.

Who can apply for a Shared Ownership Home Loan in Western Australia?

To apply for a Shared Ownership Home Loan, you must be an Australian citizen or permanent resident above 18 years of age. Additionally, you should not be earning more than the maximum limit set under the scheme. Only first home buyers living in Western Australia are eligible to purchase under this scheme.

You can visit the Keystart website to check your eligibility and find out other details about the program. It may also help to speak with a mortgage broker to find out more information and check your eligibility for any other state or government-sponsored schemes that could help you own your home sooner.

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