Midkey has secured a $100 million funding facility to grow its Australian loan book
Borrowers holding record levels of home equity but declined for new credit under income-based serviceability models will gain access to an alternative funding pathway following Specialist Finance Group’s (SFG) addition of Midkey to its national lender panel.
The partnership enables brokers within SFG national network to refer eligible clients to Midkey from mid-February. It is Midkey’s first Australian aggregator partnership and its first formal entry into the broker channel.
Midkey is an NCCP-compliant lender offering a home equity release product structured without monthly repayments. The loan can be written as a first or second mortgage and is designed for borrowers who have accumulated significant equity in a house or apartment but are unable to access additional funds through conventional lending due to serviceability constraints.
Customers with an existing mortgage can unlock up to 30% of their property’s value, while debt-free borrowers can access up to 35%. Instead of making monthly repayments, simple interest accrues over the term of the loan. A Deferral Fee is payable at the end of the loan and is calculated as a percentage of the property’s increase in value over the life of the loan. Repayment typically occurs when the property is sold or refinanced.
Midkey co-chief executive Richard Young (pictured, left) said the broker channel was central to addressing what had become a common borrower challenge.
“Brokers are increasingly seeing responsible borrowers declined by banks for new capital, even when they have built large stores of wealth in their homes,” Young said.
“Our no monthly payments loan was developed for this exact cohort. We are thrilled to have partnered with SFG so more brokers can offer a solution that reflects the financial position many households now find themselves in.”
SFG general manager Blake Buchanan (pictured, right) said brokers across the network were increasingly encountering clients who did not fit conventional lending models.
“In a challenging property and lending environment, we are focused on ensuring our brokers have access to lenders that can solve real client problems and Midkey is a new way to achieve this.
“We are seeing more scenarios where people have strong equity positions, but are being declined for additional funding due to rigid cash-flow-based serviceability assessments. This partnership with Midkey ensures brokers have a credible alternative for those situations.”
In December, Midkey secured a $100 million funding facility from global asset manager Insight Investment to grow its Australian loan book. The company said the facility provides institutional backing for its lending model at a time when demand for alternative structures is increasing.
