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.
The Midkey Deferral Fee is the fee you pay for the benefit of deferring all your principal and interest payments to the end of your Midkey home loan. It's a proportion of the increase in your home's value above the agreed initial value** over the loan term. The proportion is calculated by dividing your Midkey loan amount by your home's agreed initial value at the start of the loan. 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. However, Midkey recommends that repayments are at least $50,000 because a new independent property valuation is required for each repayment, arranged at your expense.
How the Midkey Deferral Fee works:
- If your loan is 10% of your home's agreed initial value, you pay 10% of any increase in your home's value above the agreed initial value** over the loan term.
- If your loan is 20% of your home's agreed initial value, you pay 20% of any increase in your home's value above the agreed initial value** over the loan term.
You only pay the Midkey Deferral Fee if your home’s agreed initial value increases. If it doesn't increase or it decreases, you don't pay a Midkey Deferral Fee.
We provide first and second mortgages - if you already have a mortgage over your home, your Midkey loan can be secured by a second mortgage.
*Other fees, like establishment, valuation, settlement, documentation, discharge, processing, and other incidental fees, are also payable.
**This is the agreed initial value of your home after Midkey has applied a 5% reduction to your home’s initial independent valuation.
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