Your mortgage could be doing more.
Debt recycling turns an ordinary home loan into an investment engine. Our free guide shows how property owners invest more, pay less tax and build wealth faster.
- The strategy explained in plain English
- A full worked example with real numbers
- A checklist to see if it suits your situation
Prepared by Tax On Chain, Australia's specialist crypto tax and advisory firm for high net worth investors.
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Convert "dead" interest into tax-deductible investment debt.
Most home loans are non-deductible debt: the interest on your family home gives you no tax benefit. Debt recycling replaces it with deductible investment borrowings, so the same dollars work harder for you.
Non-deductible debt
- Home loan interest is not tax deductible
- Savings or investments sit alongside your mortgage
- Non-deductible debt remains outstanding
Productive investment debt
- Savings or other investments pay down your home loan
- Those funds are redrawn to reinvest into income-producing assets
- Same investments, same overall debt, but a portion is now tax deductible
Four steps, repeated over time.
Review your finances
Identify available savings or investments and assess whether debt recycling is suitable.
Establish the right loan structure
Split your home loan to separate private and investment borrowings.
Put your capital to work
Pay down your mortgage, then redraw those funds to invest in income-producing assets.
Repeat, compound and build wealth
Direct investment income and tax savings back at the loan and repeat, growing the deductible share.
How debt recycling can work for a crypto investor.
Sarah's starting position
Although Sarah has a $500,000 cryptocurrency portfolio generating assessable income, the interest on her $1.5 million home loan is generally not tax deductible, as the loan was used to purchase her family home.
*Illustrative only. Assumes a $500,000 investment loan, a 6.5% annual interest rate ($32,500 interest expense) and a 47% marginal tax rate, giving a potential annual tax saving of approximately $15,275. Actual tax outcomes depend on your personal circumstances, the use of the borrowed funds, and applicable tax laws.
What could debt recycling save you?
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Estimate your annual tax saving
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Paid onto your mortgage, that saving could take roughly 0 years off a 30-year home loan.*
Or reinvested each year, it could grow to around $0 after 10 years.*
Note: the recycled amount has been capped at your loan balance.
*Illustrative estimate only. Assumes your portfolio is used to pay down the loan and the same amount is redrawn and reinvested in income-producing assets, with a constant interest rate and marginal tax rate. Years off your loan assume a 30-year principal-and-interest term with the tax saving paid onto the loan monthly. The 10-year figure assumes the annual saving is reinvested each year at the same rate. Not financial, tax or legal advice. Actual outcomes depend on your circumstances, the use of borrowed funds and applicable tax laws.
What our clients say.
Great experience with Tax On Chain. An awesome team that combines exceptional technical knowledge with old-fashioned customer service. Highly recommend.
PatMy experience with Tax On Chain was fantastic, I highly recommend their services. Very professional, quick to respond and easy to deal with. I dealt with Rafael and Anne and they were great. Thanks guys.
DanielEverything you need to understand the strategy.
- The strategy explained in plain English, with before and after comparisons
- Sarah's full worked example, showing the potential annual tax saving in real numbers
- The four-step process, from loan structure to reinvestment
- A suitability checklist, so you can quickly see if it fits your situation
- How crypto investors apply the strategy to on-chain income and digital asset portfolios
Debt recycling tends to suit people who…
Debt recycling isn't suitable for everyone. The right strategy depends on your financial circumstances, investment objectives and risk tolerance.
See if debt recycling could work for you.
Book a free 15-minute call with our team. We'll look at your situation and tell you honestly whether the strategy makes sense for you.
This page and the guide are general information only and do not constitute financial, tax or legal advice. Debt recycling involves borrowing to invest, which magnifies both gains and losses. Consider your circumstances and seek personal advice before acting.