The risks are what you stated you have the option to draw out more and are left with a bigger loan . You don ' t know the value on your investment property in the future and you don ' t know when the interest rates will change . If you can handle 295 k loan at say 7 to 10 % interest payments in times of no tenants then you might be fine . You need to assume worst to best case scenario . The mistake people make leveraging property is only assuming the best will happen . All the interest only advice given here shows why we have housing bubbles and I doubt these people have been through any variation of an interest rate change . It ' s the lowest in years but that will change . The rules of maintaining inflation haven ' t changed . Higher interest rates will come back .