What debt recycling actually means
Debt recycling uses the equity in your home to invest, then directs investment income and tax savings back into paying down your home loan faster.
Over time, non-deductible home loan debt is progressively replaced with deductible investment debt — without necessarily increasing your total repayments.
Why the strategy appeals to homeowners
It puts otherwise "dead" home equity to work, potentially building an investment portfolio alongside your existing mortgage.
Because the investment debt is tax-deductible, the after-tax cost of servicing it is typically lower than an equivalent amount of home loan debt.
Getting the structure right
Debt recycling relies on correctly separating deductible and non-deductible debt — the loan structure matters as much as the investment choice.
It carries investment risk and isn't suitable for everyone; speaking with a broker and financial adviser together is the safest way to assess if it fits your circumstances.