We live on Sydney's Northern Beaches and would like to put in a granny flat at our PPOR. We calculate the tenant will generate more than enough income to service a loan to build the flat 120,000k @ 4.5% = $5,400pa IO repayments Rent @ $400pw = $20,800pa Even taking into account having flat vacant for a couple of weeks, plenty there to cover costs Our current financial situation is PPOR $1.4m LVR 50% IP 1 $580k LVR 65 % IP 2 $600k LVR 85% IP 3 $400k owned outright However, husband was made redundant last year and still unemployed. I was made redundant this year but after 5 months have found another permanent full time job. Investment properties are paying for themselves and we can still afford mortgage repayments on PPOR on one wage although much tighter. If we go to the banks for finance we won't have serviceability on paper although I know the granny flat would pay for itself. Hubby is in his 60s so won't probably ever work again. I am in 50s so still have 10 years plus to work. Any ideas about how we could finance a granny flat?