Buying an Investment Property in Sydney's Hills District — What You Need to Know

Investment loan requirements

Investment loans typically require a higher deposit than owner-occupier loans — commonly 10–20% minimum, with 20% generally needed to avoid LMI. Interest rates on investment loans are typically slightly higher. Serviceability assessments factor in existing debts more stringently. A mortgage broker can compare investment loan products across lenders. Individual eligibility and rates vary.

Interest-only vs principal and interest

Many investors use interest-only repayments during the investment period to manage cash flow. However, interest-only periods are finite (typically 1–5 years) and revert to higher P&I repayments. The tax treatment of investment loan interest has specific rules — consult a registered tax agent, not a mortgage broker, for tax advice. Individual outcomes vary.

What to consider in an investment property

Factors commonly considered (not a recommendation — independent assessment required): proximity to transport, school catchment zones, vacancy rates in the area, rental yield relative to purchase price, body corporate fees for strata, land content and development potential. Research thoroughly and seek independent property and financial advice.

Risks of property investment

Key risks include: interest rate increases affecting cash flow; vacancy periods; unexpected maintenance costs; changes to negative gearing or CGT rules; illiquidity; oversupply. Past property market performance does not predict future results. This is general information only — not financial advice.

Using equity to buy an investment property

It may be possible to use equity in your existing home as a deposit for an investment property, subject to lender assessment. This increases your total debt and risk. Seek independent financial advice before accessing equity for investment. Individual eligibility varies.

Frequently asked questions