It is well-known that wireless channel reciprocity together with fading can be exploited to generate a common secret key between two legitimate communication partners. This can be achieved by exchanging known deterministic pilot signals between both partners from which the random fading gains can be estimated and processed. However, the entropy and thus quality of the generated key depends on the channel coherence time. This can result in poor key generation rates in a low mobility environment, where the fading gains are nearly constant. Therefore, wide-spread deployment of wireless channel-based secret key generation is limited. To overcome these issues, we follow up on a recent idea which uses unknown random pilots and enables “on-the-fly” key generation. In addition, the scheme is able to incorporate local sources of randomness but performance bounds are hard to obtain with standard methods. In this paper, we analyse such a scheme analytically and derive achievable key rates in the Alice-Bob-Eve setting. For this purpose, we develop a novel approximation model which is inspired by the linear deterministic and the lower triangular deterministic model. We claim that our novel approach provides an intuitive and clear framework to analyse similar key generation problems.