Thanks guys,

We have thought and looked into this a lot and yes all the sums work out in terms of my sister affording to pay her part of the loan and full market rent plus half of all the incidentals, rates etc etc. Basically on ongoing costs it will be straight down the line. We hav spoken to a morgage broker and financial adviser and have been advised there is no problems with setting up this arrangement, but I didn't specifically clarify having all three names on the morgage. We have been extremelely careful with this and we are all confident that this can be a win win situation. The main question we are not sure of is the tax side of things as there is no way that we can get a separate loan from my sister as we are using the investment as security on the loan to entirely protect our PPoR and morgage. Hence as we cant get entirely separate loans we will simply use a split loan for the morgage on the investment so that we can take care of our 150 and my sister her 100 – and if she wants to make extra repayments etc it doesn't get confusing as to who owns what. At the end of the day of course we are liable for the others loan if one of us defaults.

I just don't know whether if we keep the paper trail of her paying the deposit and then the loan sizes have been adjusted based on what was originally put in if this is enough for the ATO to appreciate our half really is 150K and not half of the morgage!