Buying a unit or a house is one of the biggest decisions home buyers face, and in 2026 that choice carries real home loan implications, particularly in a high-value market like North Shore Sydney. Houses often appeal for long-term growth, while units can offer a more accessible entry point, but lenders assess each property type differently when it comes to deposits, borrowing power, and ongoing costs. 

Understanding these differences can have a direct impact on approval outcomes and affordability. This is where experienced North Shore Sydney brokers, such as Sabea Financial, add real value by interpreting lender policy, assessing borrowing capacity, and aligning loan structure with your property choice and future plans. 

Below, we break down the key home loan pros and cons of buying a unit versus a house in 2026.

Is it better to buy a unit or a house in Australia?

Whether it’s better to buy a unit or a house in Australia depends on your budget, borrowing capacity, and long-term goals. Houses generally offer more land and stronger long-term growth, but they usually require a larger deposit and higher borrowing power. Units are often more affordable and easier to enter the market, though lenders may assess them differently and factor in strata costs. 

For buyers in high-priced areas like North Shore Sydney, the “better” option is the one that aligns with lender requirements and your financial position in 2026, rather than the property type alone.

Let’s break down each of the pros and cons when buying a unit vs a house.

7 Pros of Buying a Unit

1. Lower purchase price

Units are generally more affordable than houses, making them an attractive entry point. In North Shore Sydney, this can allow buyers to enter premium suburbs sooner.

2. Smaller deposit requirements

Because the purchase price is lower, the required deposit is often more manageable. This is particularly helpful for first-home buyers in high-value North Shore Sydney markets.

3. Reduced maintenance responsibilities

Strata usually covers external maintenance and common areas. This can save time and reduce unexpected repair costs for unit owners.

4. Access to lifestyle locations

Units are often located close to transport, shops, and employment hubs. In North Shore Sydney, this means shorter commutes and strong lifestyle appeal.

5. Potentially stronger rental demand

Units in well-connected suburbs often attract consistent tenant demand. This can support rental income in popular North Shore Sydney areas.

6. Lower ongoing utility costs

Smaller living spaces typically mean lower energy and water usage. This can help manage household expenses over the long term.

7. Easier entry for first-home buyers

Units align well with first-home buyer grants and concessions when eligibility criteria are met. This makes them a practical stepping stone into the North Shore Sydney property market.

 

7 Cons of Buying a Unit

1. Ongoing strata fees

Unit owners must pay strata levies to cover building maintenance and shared facilities. In North Shore Sydney, these costs can be significant and affect borrowing capacity.

2. Stricter lender assessment

Lenders apply tighter criteria to units, especially in high-density developments. This can limit lender choice or reduce the maximum loan amount.

3. Limited capital growth potential

Units often rely more on market conditions than land value for growth. Over time, this can result in slower price appreciation compared to houses in North Shore Sydney.

4. Less control over building decisions

Major repairs or upgrades are decided collectively by the owners corporation. You may have limited influence but still be required to contribute financially.

5. Risk of special levies

Unexpected building repairs can trigger special levies. These one-off costs are not always budgeted for and can impact cash flow.

6. Restrictions on renovations or use

Strata by-laws may limit renovations, pets, or short-term leasing. These rules can reduce flexibility for owner-occupiers and investors.

7. Resale can be more competitive

Units often compete with similar properties in the same complex. This can make resale slower or more price-sensitive in North Shore Sydney markets.

When viewed together, these drawbacks show why units are not the right choice for every buyer, especially where lending flexibility, growth, and control are priorities. To make a balanced decision, it’s just as important to understand the benefits and trade-offs of buying a standalone property, which leads into the pros and cons of buying a house.

7 Pros of Buying a House

1. Stronger long-term capital growth

Houses typically benefit from land value appreciation, which has historically outperformed units. In North Shore Sydney, limited land supply often supports stronger long-term price growth.

2. Greater lender flexibility

Lenders generally view houses as lower risk compared to units. This can mean higher loan-to-value ratios and a wider choice of lenders for North Shore Sydney buyers.

3. No strata or body corporate fees

Owning a house removes the need to pay ongoing strata levies. This can improve cash flow and borrowing capacity, especially when lender serviceability is assessed.

4. More freedom to renovate or extend

Houses allow you to renovate, extend, or improve the property without strata approval. This flexibility can increase value and suit growing families across North Shore Sydney suburbs.

5. Better resale demand

Standalone houses appeal to a broad range of buyers, including families and upgraders. This often results in stronger resale demand in tightly held North Shore Sydney markets.

6. Easier refinancing and equity access

Banks are usually more comfortable lending against houses. This can make refinancing or accessing equity smoother as your financial needs change.

7. Lifestyle and privacy benefits

Houses provide more space, privacy, and separation from neighbours. For many North Shore Sydney buyers, this supports long-term owner-occupier living and lifestyle stability.

7 Cons of Buying a House

1. Higher purchase price

Houses generally cost more than units. In North Shore Sydney, this can significantly increase the required deposit and loan size.

2. Larger deposit requirements

Higher property values usually mean a larger deposit is needed. This can delay entry into the market for some buyers.

3. Increased maintenance costs

All repairs and upkeep are your responsibility. Over time, maintenance expenses can add up and affect household budgets.

4. Higher ongoing ownership expenses

Council rates, insurance, and utilities are often higher for houses. Lenders also factor these costs into serviceability assessments.

5. Less affordability for first-home buyers

Houses may push borrowing limits beyond what lenders are comfortable approving. This can restrict options for first-time buyers.

6. Potential for overcapitalisation

Renovations do not always add equivalent value. In tightly priced North Shore Sydney suburbs, this risk can be higher.

7. Longer commute trade-offs

Houses are often located further from transport hubs. This may mean longer commute times compared to unit living in central North Shore Sydney areas.

When you put these challenges together, it’s clear that buying a house takes careful planning and a solid grasp of lender rules. An experienced mortgage broker helps you understand what you can afford, interpret lending policy, and structure your loan so your property choice fits both your lifestyle and borrowing capacity.

How Mortgage Brokers Help Buyers with Purchasing a Unit or a House

Choosing between a unit and a house affects more than lifestyle. It directly influences lender policy, borrowing capacity, and approval outcomes, making expert guidance - such as a broker - essential.

Benefits of working with a mortgage broker:

• Explains how different lenders assess units versus houses.
  
• Matches your property type to suitable lender policies.
  
• Calculates borrowing capacity accurately before you buy.
  
• Structures applications to reduce approval conditions.
  
• Identifies deposit strategies and LMI considerations.
  
• Helps avoid costly mistakes before contract exchange.
  
  

Working with an experienced North Shore Sydney broker ensures your property decision aligns with your financial position and long-term goals. Speak with Sabea Financial to receive clear advice, tailored loan strategies, and trusted support that moves you forward with confidence.

FAQs

Is it easier to get a home loan for a house than a unit?

Yes, houses are generally easier to finance because lenders view them as lower risk. They often allow higher loan-to-value ratios and offer more lender options.

Do units always require a larger deposit?

Not always, but some units do require a larger deposit depending on building type and location. High-density or investor-heavy developments may attract stricter limits.

How do strata fees affect borrowing capacity?

Strata fees are treated as ongoing commitments by lenders. Higher fees can reduce your borrowing capacity because they impact your living expenses.

Are interest rates higher for units than houses?

Interest rates are usually similar, but some lenders apply stricter terms to units. The main difference is policy acceptance rather than pricing.

Can first-home buyers use grants for units?

Yes, eligible first-home buyers can use grants and concessions for units. The property must meet state-based value and occupancy rules.

Is capital growth better for houses in Sydney?

Historically, houses have shown stronger long-term capital growth due to land value. However, location and demand still play major roles.

Should I get pre-approval before choosing a property type?

Yes, pre-approval clarifies your limits and avoids disappointment. It also ensures the lender accepts the specific property type you plan to buy.

Final Thoughts

Choosing between a unit and a house is more than a lifestyle decision. It directly affects how lenders assess your application, how much you can borrow, and how flexible your loan remains over time. Understanding lender policy, strata implications, and long-term goals allows you to make informed choices with confidence. 

This is where trusted North Shore Sydney mortgage brokers make a measurable difference. Sabea Financial supports buyers through clear advice, tailored loan structuring, and policy expertise designed to reduce risk and improve outcomes. Whether you are buying your first home, upgrading, or refinancing in 2026, expert support keeps your decision grounded and future-focused. 

Speak with our brokers at Sabea Financial today by calling us at 1300 001 755 for a personalised loan consultation.



External Resources

https://www.moneysmart.gov.au/home-loans
https://www.apra.gov.au
https://www.servicesaustralia.gov.au