How Does Keystart Actually Work? Income Limits, Building, and What Happens Next

Most people who come to me have already heard of Keystart. They know it is a low-deposit home loan from the WA Government. What they are less clear on is the detail — the actual income limits, whether it works for building a new home, what the repayments look like during construction, and what happens once they are in.

These are the questions I get asked most often. This post answers all of them.

If you want the basics — what Keystart is and whether you are eligible — read What Is Keystart and Am I Eligible? first. This post picks up from there.

Keystart has income thresholds that determine whether you qualify. These vary by loan product and region, and are reviewed periodically — always confirm current figures directly with Keystart or through a consultant. As of late 2026, the limits across Keystart's main products are:

Low Deposit Home Loan

Shared Ownership Home Loan

Urban Connect Shared Equity Home Loan

Skilled Start Home Loan

These are gross income figures — your income before tax. They include salary, wages, rental income, and most other regular income sources.

A few things worth knowing about how income is assessed:

Overtime and bonuses are included. If you regularly receive overtime or bonuses, Keystart will typically include a portion of that income in their assessment. This can work in your favour if your base salary sits just under the threshold.

Both incomes count on a joint application. If you are applying with a partner, both incomes are combined. It is worth checking your combined figure before assuming you qualify.

The thresholds change. Keystart adjusts its income limits from time to time in response to market conditions and government policy. The figures above are a guide, not a guarantee. Always verify current limits before making decisions based on them.

Yes — and this is one of the most important things to understand, because a lot of people assume Keystart is only for buying an existing property.

Keystart can be used for:

• House-and-land packages — where you purchase a block of land and a new home design together as a bundled product
• Separate land and construction — where you purchase a block of land first, then enter a separate building contract
• Established homes — existing properties on the market

For most of my clients who are building, the house-and-land package route is the most straightforward. The land and the build are priced together, the finance is structured to cover both, and the process is relatively clean.

Building separately — buying land first, then contracting a builder — is also possible with Keystart, but the finance structure is more complex. The land purchase and the construction loan are handled in stages, and there are specific requirements around how the loan is drawn down during the build.

This is the question that surprises people most — in a good way.

When you are building a new home, you do not draw down the full loan amount on day one. The builder is paid in progress payments as each stage of construction is completed. Your loan balance — and therefore your repayments — grows gradually as the build progresses.

In the early stages of construction, your repayments can be very low. For many Keystart borrowers building a new home, repayments during the construction period can be as low as $400 a month.

That is manageable alongside your current rent. You are effectively paying rent and a small construction loan repayment at the same time — and once you move in, the rent stops and your full mortgage repayment begins.

The full repayment kicks in once construction is complete and you receive the keys. At that point, your loan balance reflects the full cost of the land and the completed home, and your repayments are calculated on that total.

Keystart's property price limits vary by loan product. For the standard Low Deposit Home Loan — the most commonly used product for new builds — the cap is $860,000 across metro and regional areas of WA, and the same in the Kimberley and Pilbara.

Shared equity products have lower caps: Urban Connect Shared Equity sits at $800,000, and the Shared Ownership Home Loan at $720,000.

For a new build, the cap applies to the combined value of the land and the completed home at the time of valuation. A block in an outer suburb with a modest home design will typically sit well within the limit. If you are close to the cap, it is worth getting a valuation estimate before committing to a contract.

Keystart is designed as a stepping stone, not a forever loan. Understanding the pathway out is just as important as understanding how to get in.

From the moment you move in, you are building equity in two ways: through your repayments (which reduce the loan balance) and through any increase in the property's value over time.

Keystart's interest rate is variable and is set by the WA Government. It is typically slightly higher than the most competitive rates available from major banks. This is the trade-off for the lower deposit requirement and the accessibility of the scheme.

Once your loan-to-value ratio (LVR) drops below 80 per cent — meaning you own at least 20 per cent of the property's value — you are in a strong position to refinance to a mainstream lender.

At that point, you can access more competitive interest rates, which reduces your ongoing repayments. Many Keystart borrowers reach this position within five to seven years, depending on how quickly the property appreciates and how much they have paid off.

Keystart actively encourages refinancing when you reach this point. It is not a scheme designed to keep you locked in — it is designed to get you started.

If Perth property values increase while you are in your Keystart loan, your equity position improves faster than your repayments alone would achieve. This is one of the reasons getting in sooner — even with a smaller deposit — can be more advantageous than waiting to save a larger one.

The risk of waiting is that prices move further ahead while you are saving. Getting in with a 2 per cent deposit and building equity over five years often puts you in a better position than waiting five years to save a 10 per cent deposit on a property that now costs significantly more.

Yes. Keystart allows additional repayments, which can help you build equity faster and reach the refinancing threshold sooner.

If you receive a bonus, a tax refund, or any lump sum, putting it against your Keystart loan is a straightforward way to accelerate your equity position.

Keystart also administers the Urban Connect Shared Equity scheme, where the WA Government co-owns a portion of your property. This allows you to enter the market with an even smaller deposit — sometimes as low as 2 per cent of your share of the property.

The trade-off is that when you sell or refinance, you repay the Government's share of the property at its current market value. If the property has increased in value, the Government's share has also increased.

Urban Connect has its own income and property limits, which are different from the standard Keystart thresholds. It is worth understanding both options to see which suits your situation better.

"My income is just over the limit — is there anything I can do?"

Not with Keystart directly. The income thresholds are firm. However, there may be other low-deposit options available through mainstream lenders, or the Federal Government's Help to Buy scheme may be worth exploring. It is worth having a conversation to look at all the options.

"Can I use the First Home Owner Grant with Keystart?"

Yes. If you are eligible for the First Home Owner Grant — currently $10,000 for new homes in WA — you can use it alongside a Keystart loan. The grant can contribute to your deposit or reduce your loan amount.

"What if my circumstances change after I take out the loan?"

Keystart has provisions for hardship and changed circumstances. If your income changes significantly, contact Keystart directly to discuss your options. Like any lender, they would rather work with you than see a loan go into default.

"Can I rent out the property?"

No. Keystart is for owner-occupiers only. You must live in the property as your principal place of residence. Renting it out would breach the loan conditions.

Keystart is a genuinely useful scheme for the right person in the right situation. It is not for everyone — the income limits, property caps, and slightly higher interest rate mean it suits a specific profile.

The best way to know whether it is right for you is to look at your actual numbers: your income, your savings, the property you are targeting, and your timeline. That is a conversation I have with clients every day, and it takes about 20 minutes to get a clear picture.

If you are wondering whether Keystart is your path in, reach out. I will give you a straight answer.

This guide is general information only and is current as at October 2026. Keystart's eligibility criteria, income limits, property price caps, and interest rates are subject to change. Always verify current figures directly with Keystart or an accredited mortgage broker before making financial decisions.