Debt Recycling Strategy Simulator
Simulate tax deductions and long-term wealth of converting non-deductible home debt to deductible investment debt.
Debt Recycling Strategy Simulator
Simulate tax deductions and wealth differences from converting non-deductible home loans to tax-deductible investment splits.
Home & Investment Parameters
Projection Breakdowns
What is the Debt Recycling Strategy Simulator?
Check the wealth impact of debt recycling in Australia. Simulates split loan setups, tax refund write-offs, and portfolio growth compared to traditional home payoff strategies.
How Does the Debt Recycling Strategy Simulator Work?
1. Enter home value and loan balance. 2. Input target investment amount. 3. Input tax rate and interest rate. 4. View tax refunds, net benefit, and 10-year wealth projections.
Formula & Calculation Method
Splits home loan, offsets split with equity to pay down, redraws to invest. Calculates tax refund = investment amount * interest rate * marginal tax rate. Projects compounded return difference.
Example Calculation
Invest $50k at 6.2% loan rate. Interest = $3,100. Tax bracket 34.5% refund = $1,070. Portfolio return (8%) = $4,000. Net yearly strategy benefit = $4,000 - ($3,100 - $1,070) = $1,970.
Frequently Asked Questions
Splits home loan, offsets split with equity to pay down, redraws to invest. Calculates tax refund = investment amount * interest rate * marginal tax rate. Projects compounded return difference.
Disclaimer: This tool is provided for informational and calculation purposes. Output values are estimates based on standard user inputs.