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What is “Debt Recycling”?

 

Debt Recycling is well suited to you if you have an existing mortgage and would like to make a second investment in property or shares.

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This strategy takes your home loan debt which isn’t deductible and converts the debt, into a tax deductible investment loan.

The investment loan should help you pay off your mortgage and at the same time increase your net worth.

You will need to ensure that you have plenty of discipline and a stable income to ensure that you meet repayments.

Engage an accountant to explain costs, interest and depreciation and make sure that you have free cash flow to pay both the investment loan and the home loan.

Remember, you will have to pay capital gains tax if you decide to sell your investment.

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Marlene F Liontis