Debt recycling

Turn mortgage paydown into tax-effective investing.

Debt recycling: pay down your home loan, then redraw to invest. The redrawn amount is used to buy income-producing assets, so the interest on that portion can be tax-deductible. Compare that strategy to simply paying down the mortgage.

How it works

You need spare cash and a redraw or offset facility. You pay down the loan, then redraw the same amount to invest in shares, ETFs, or other qualifying investments. The ATO treats the redrawn debt as investment loan interest (deductible). This calculator compares total benefit over time: interest saved by paying down vs investment growth minus after-tax interest on the recycled debt.

This is general information only, not personal advice. Structure and tax outcomes depend on your situation.

Your loan

Amount you'll pay down then redraw to invest.

Investment & tax

e.g. 34.5% for $90k–$180k taxable income.

Results

Pay down only — interest saved —

Debt recycle — investment value (less debt) —

This is an estimate only, not personal advice. Omission of data or unique variable will have a considerable influence on outcomes. Consider speaking to a licensed adviser for a plan tailored to you where personal variables will be confirmed by supporting documents specific to your preferences and circumstances

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What to do next

Debt recycling requires correct loan structure and documentation. Speak to your accountant or a licensed adviser.

Mortgage refinance Other calculators

Information is intended to be only used as a guide. We highly recommend you seek professional advice from licensed professionals. Omission of detail may make scenarios and opportunities not suitable for your specific circumstances.