Debt Recycling Strategy
Your mortgage can do more than sit there. It can build your wealth.
Turning non-deductible home loan debt into tax-deductible investment debt sounds simple on paper. Getting the structure, serviceability, and risk settings right for your actual circumstances is where the real work happens.
My focus isn’t just setting up the loan split, it’s making sure the structure actually converts your debt into wealth, without overstretching you.
Prefer to talk first? Call Durand direct on 0450 275 656
How I can help
With over 23 years in financial services, not just mortgage broking, I bring a depth of understanding to tax structure, cash flow, and lending that most brokers simply don’t have. Getting a loan split arranged isn’t the goal. Structuring it so it genuinely builds wealth is.
Structure that holds up to scrutiny
Clean loan splits and correctly traced funds, documented in a way that satisfies your accountant and, if it ever comes to it, the ATO.
Serviceability built for the long game
I model your borrowing capacity against real buffers, not just today’s rate, so the strategy can survive a rate rise or a quieter income year.
Lender navigation
Matching your circumstances with lenders genuinely experienced in debt recycling structures, for a clean split and competitive terms.
Coordination with your adviser & accountant
I structure the lending. Your adviser picks the investments and your accountant confirms the tax treatment. I make sure all three plans line up.
Cash flow & risk review
An honest look at whether your income and buffer can sustainably support the investment loan, not just whether a lender will approve it.
Ongoing structure reviews
Debt recycling isn’t a set-and-forget strategy. I check in as your equity, income, and goals change, so the structure keeps pace.
Structure that holds up to scrutiny
Clean loan splits and correctly traced funds, documented in a way that satisfies your accountant and, if it ever comes to it, the ATO.
Serviceability built for the long game
I model your borrowing capacity against real buffers, not just today’s rate, so the strategy can survive a rate rise or a quieter income year.
Lender navigation
Matching your circumstances with lenders genuinely experienced in debt recycling structures, for a clean split and competitive terms.
Coordination with your adviser & accountant
I structure the lending. Your adviser picks the investments and your accountant confirms the tax treatment. I make sure all three plans line up.
Cash flow & risk review
An honest look at whether your income and buffer can sustainably support the investment loan, not just whether a lender will approve it.
Ongoing structure reviews
Debt recycling isn’t a set-and-forget strategy. I check in as your equity, income, and goals change, so the structure keeps pace.
Turning peak earning years into a head start on financial freedom
Two young professionals, 43 and 41, were juggling three children, including private secondary school fees for their eldest, and on a combined household income of around $250,000. Having settled into highest-earning years 2 years ago, they didn’t want to just keep chipping away at the mortgage and hope things worked out. They wanted to use this stage of life deliberately: build a genuine nest egg and get meaningfully closer to financial freedom while their earning capacity was at its strongest.
They owned a home valued at just over $1.015 million, with a home loan balance of $547,000. With strong equity built up and a clear goal (which was to reduce non-deductible debt while building a portfolio that could keep generating income) they came to me to structure a debt recycling strategy around their existing loan.
Working closely with their financial adviser and accountant, we split $100,000 of equity into its own dedicated investment loan, kept completely separate from a further $30,000 drawn at the same time for home renovations, which was added to the existing home loan rather than the investment split. That separation matters: keeping the investment portion clean and clearly traced is what keeps the interest deductible and the structure audit-ready.
Once we secured the lending, the client advised us that, in conjunction with their financial planner, rather than deploying the full $100,000 at once, $50,000 was invested immediately into a portfolio of ETFs selected with their financial adviser, with the remaining $50,000 drip-fed into the market over the following months to manage timing risk.
The client has advised that the $100,000 is now fully invested, generating income of approximately 4% annually, which is being directed straight back into paying down their non-deductible home loan debt, while school fees and everyday life continues to be covered comfortably from their PAYG earnings cash flow.
The strategy gives this professional couple two things at once: a faster path to clearing non-deductible debt during their peak earning years, and the flexibility to sell the investment and be completely debt-free whenever they choose.
Not just a repayment strategy
Debt recycling isn’t just making extra repayments with a different label. It involves using available equity or surplus repayments to invest in income-generating assets, reborrowing that amount through a loan split kept clearly separate from your home loan, and directing the investment returns and tax benefits back into accelerating repayment and further investment. The mechanics are simple to describe, but you need a good mortgage broker, a good financial planner and good accountant all working together for your best interest. Getting the structure right for your serviceability, tax position, and risk tolerance is where most of the value, and most of the risk, sits.
It's a strategy best suited to
- Stable, high household incomes
- Owner-occupied home loans with genuine, useable equity
- Strong cash flow and capacity for surplus repayments
- A long-term investment mindset, not a quick win
- A tolerance for some investment risk
Why clients choose me for debt recycling
With over 23 years in financial services, I understand the intersection of lending, tax structure, and long-term wealth building better than a broker who only compares rates. I don’t just arrange the loan split, I look for the detail in your numbers that makes the difference between a structure that merely works on paper, and one that actually builds wealth.
Not just a repayment strategy
Debt recycling isn’t just making extra repayments with a different label. It involves using available equity or surplus repayments to invest in income-generating assets, reborrowing that amount through a loan split kept clearly separate from your home loan, and directing the investment returns and tax benefits back into accelerating repayment and further investment. The mechanics are simple to describe, but you need a good mortgage broker, a good financial planner and good accountant all working together for your best interest. Getting the structure right for your serviceability, tax position, and risk tolerance is where most of the value, and most of the risk, sits.
It's a strategy best suited to
- Stable, high household incomes
- Owner-occupied home loans with genuine, useable equity
- Strong cash flow and capacity for surplus repayments
- A long-term investment mindset, not a quick win
- A tolerance for some investment risk
Why clients choose me for debt recycling
With over 23 years in financial services, I understand the intersection of lending, tax structure, and long-term wealth building better than a broker who only compares rates. I don’t just arrange the loan split, I look for the detail in your numbers that makes the difference between a structure that merely works on paper, and one that actually builds wealth.
How I can help navigate your next move
Debt recycling is complex. The process working with me shouldn’t be.
Why professionals work with me
Every debt recycling strategy is delivered by the same person, start to finish, not handed between call centre staff.
23+
Years in financial services
70+
Lenders on panel
5★
Client feedback
1:1
End-to-end service, no handoffs
Debt Recycling FAQs
What is debt recycling in simple terms?
Debt recycling is a strategy that gradually turns your non-deductible home loan debt into tax-deductible investment debt. Instead of just paying down your mortgage, you use your growing equity or surplus repayments to invest in income-producing assets, and the loan used for that investment can generate a tax deduction on its interest.
How much equity do I need to start debt recycling?
There is no fixed minimum, but most lenders and brokers look for a loan-to-value ratio comfortably below 80 percent so there is genuine, useable equity once buffers and serviceability are accounted for. The right starting point depends on your property value, your existing loan balance, and how much surplus cash flow you have to support the investment loan.
Is debt recycling risky?
Debt recycling increases your overall borrowing and links that borrowing to investment markets, so it carries more risk than simply paying down your mortgage. Property and share markets can fall, interest rates can rise, and the strategy works best when you have stable income, a cash flow buffer, and a long-term outlook. It is not suitable for everyone, which is why the structure needs to be assessed against your personal circumstances.
Do I need a financial adviser as well as a mortgage broker for debt recycling?
In most cases, yes. As your mortgage broker, I structure the lending side of the strategy, including loan splits and how funds are drawn and invested. Investment selection and tax advice sit with a financial adviser and accountant, and the strongest debt recycling strategies are built with all three working from the same plan.
How is debt recycling different from just borrowing to invest?
Borrowing to invest, often called gearing, adds new debt on top of what you already owe. Debt recycling does not necessarily increase your total debt in the same way. It reshapes the debt you already have, converting the non-deductible portion into a structured, tax-deductible investment loan as you pay down your home loan.
How is your approach to debt recycling different from a typical broker?
Most brokers treat debt recycling as a loan-split exercise — set up the structure, done. With over 23 years in financial services, I look beyond that to whether the numbers, your cash flow buffer, and your risk tolerance actually support the strategy long-term, not just whether the split can be arranged.
Related reading
Want to go deeper before you get in touch? Start here.
Debt recycling – case study
How another couple used debt recycling to turn their mortgage into a wealth-building engine.
Offset vs Redraw
Not ready for debt recycling yet? Here’s how to make the most of your home loan in the meantime.
Explore more lending options
Debt recycling is one piece of the picture — here’s where else to look.
Equity release
Unlock the equity in your home for other wealth-building goals, whether or not debt recycling is the right fit.
Investment property loans
Prefer property over shares or managed funds? See how investment property lending is structured for growth.
SMSF lending
Looking to build wealth through your super instead of, or alongside, your home loan? Explore SMSF lending.
Ready to explore debt recycling?
Tell us about your home loan and your goals and we’ll come back with an honest read on whether debt recycling fits your numbers.