See how long it takes to convert your home loan into deductible investment debt at your current repayment, and what you would owe and own when it is done.
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A 30-year repayment on this balance is a month. Your total debt does not fall while recycling: it changes from non-deductible to deductible.
Estimates only, on the assumptions shown. Nothing you enter is stored or sent. Not a quote, and not financial or tax advice.
Home › Calculators › When Is My Loan Fully Deductible
Without recycling, the calculator counts the months to clear the home loan at your current repayment.
With recycling, each month's principal reduction is borrowed back through the investment split and invested. Your repayment budget stays the same, so investment interest is paid from it, and investment income goes onto the home loan. Once a year the tax effect of income minus investment interest is applied to the home loan.
A starting lump from savings or equity converts that amount on day one. The result is the month the home loan reaches zero, the investment debt at that point and the portfolio at cost.
Debt recycling converts debt; it does not remove it. At the end you still owe roughly your original balance, now as investment debt.
With a fixed budget, the pace depends on income yield against the investment loan rate. If after-tax income is below after-tax investment interest, part of each repayment goes on investment interest and the home loan takes longer to clear. With the default 4% yield against a 6% rate, the conversion can run several years past the original term.
Extra cash flow or a starting lump brings the date forward. The extra repayments vs debt recycling calculator shows the effect of a monthly surplus.
The output is a pace, not a promise. Rerun it whenever your rate, income or repayment changes, and compare the date with your own plans for work and retirement.
If the recycling date lands later than your current payoff date and you have no extra cash to add, you are trading a known payoff for a longer one in exchange for a portfolio. That can still make sense over a long horizon.
It may not suit if you plan to retire, downsize or cut back work before that date. Our guide on how long debt recycling takes covers what speeds it up.
Alex can check your loan, your equity and your borrowing capacity, and tell you what the lending side would look like.
Request a call with Alex →Not on its own. It changes the type of debt you hold rather than the amount, so at the end you owe roughly what you started with, as deductible investment debt. It can bring the home loan payoff forward when you add extra cash flow or a lump sum, or when after-tax investment income exceeds the after-tax interest.
It stays in place until you repay it. Some people keep it and the portfolio for the long term, others redirect their full repayment to it or sell investments to reduce it. Selling may trigger capital gains tax. Your financial adviser and registered tax agent can help plan that stage.
So the result does not depend on a growth forecast. The figure is simply what you invested along the way. Its market value at that date could be higher or lower, and that uncertainty is the main risk of the strategy. Use the extra repayments vs debt recycling calculator to test growth assumptions.
A worked example of converting a $600,000 home loan.
Read more → GUIDEWhat to do with investment debt as work slows down.
Read more → RESOURCECheck progress against your conversion date each year.
Read more →
1. Arranged a loan when our small business situation made it difficult to qualify.
2. Met requirements to have funding available by a specified date.
3. Understood my needs to setup debt recycling to allow tax structuring.
4. Communicated well throughout.
I would use their services again.
Alex, Jess and the Kingfisher team were second to none and their process from start to finish was faultless. As a self-employed business owner, it can be difficult to obtain finance at the best of times. The Kingfisher team made this an easy and efficient proposition and their continued transparent and efficient communication ensured we were kept up to date at all times. Highly recommend them for your finance needs!
Alex and Jess dealt with our investment loan and provided a top tier service. They kept us up to date and communicated every step of the process making it a seamless and smooth experience! Awesome work team we will definitely be back for future loans!
Jess from Kingfisher was outstanding. I couldn't fault her communication, expertise or dedication to finding the best loan for our situation. The entire process was seamless from start to finish. We'll definitely be using Kingfisher again in the future. A top-tier organisation.
