Debt Recycling Calculator
Estimate your financial outcomes from debt recycling. Enter your details to see projected investment growth, tax savings, and net position over time.
Debt Recycling
Debt recycling is a financial strategy that converts non-deductible home loan debt into tax-deductible investment debt. By progressively using available equity to invest, you can reduce your non-deductible mortgage, grow an investment portfolio, and potentially increase your wealth through tax savings and investment returns. This approach is commonly used in Australia and can be tailored to individual circumstances, but results depend on investment performance, interest rates, and tax rules.
Debt recycling is a financial strategy that converts non-deductible home loan debt into tax-deductible investment debt. By progressively using available equity to invest, you can reduce your non-deductible mortgage, grow an investment portfolio, and potentially increase your wealth through tax savings and investment returns. This approach is commonly used in Australia and can be tailored to individual circumstances, but results depend on investment performance, interest rates, and tax rules.
How to Use the Debt Recycling Calculator
Step One: Enter your annual taxable income, initial mortgage balance, and the current mortgage interest rate. This provides the foundation for your debt recycling scenario.
Step Two: Specify the annual amount you plan to recycle from your mortgage into investments. Then, input your expected investment capital growth rate and dividend yield. These figures help estimate your portfolio’s future value.
Step Three: Choose the number of years you want to project and enter your marginal tax rate. This allows the calculator to estimate tax savings from deductible investment interest.
Step Four: Click the Calculate button. The calculator will display a year-by-year breakdown of your recycled debt, portfolio value, tax savings, dividends, and your net financial position.
Step Five: Review the summary table and explanation to understand how debt recycling could impact your wealth over time. Adjust any input values to compare different strategies or scenarios for your financial goals.