No lender sells a debt recycling home loan as a product. You need an ordinary home loan with the right settings and a lender whose policy fits your plan. We find it and set it up.
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The strategy runs on an ordinary home loan, set up so the borrowing for your home and the borrowing to invest never share an account.
That separation matters for tax. The Australian Taxation Office (ATO) looks at what borrowed money is used for, not the property securing it, and interest on a mixed-purpose loan has to be apportioned.
Our guide to how debt recycling works explains the strategy itself. The loan that carries it needs four things:
Each split has its own settings, and the two usually differ.
| Setting | Home split | Investment split |
|---|---|---|
| Purpose | Your home and anything private | Buying income-producing investments only |
| Rate type | Variable, or part fixed if you want certainty | Usually variable, so redraw stays available |
| Repayment type | Principal and interest | Principal and interest or interest-only |
| Offset account | Linked here | Not linked |
| Extra repayments | Directed here first | Usually the minimum only |
How many splits you need, and their size, depends on your investment plan. Our page on how we structure the splits covers that detail.
Variable splits keep redraw and extra repayments open. NAB notes that both may not be available on a fixed portion, and that changing or repaying it early may trigger break costs.
CommBank's fixed rate terms, for example, allow up to $10,000 a year in extra repayments without added fees, and those payments can't be redrawn until the term ends. For some rate certainty, part of the home split can be fixed while the investment split stays variable.
Interest-only on the investment split keeps the deductible balance steady, so every spare dollar can go to the home split. Moneysmart notes the trade-offs: the rate could be higher, you pay more over the life of the loan, and repayments rise when the loan reverts to principal and interest.
Principal and interest on both splits lowers total debt sooner, but the deductible balance falls too. Settle the choice with your accountant and financial adviser before the loan is lodged.
Fees that repeat with every split can undo a sharp rate. We check these for each lender:
Compare the comparison rate and total cost over the years the strategy will run, not the headline rate.
We compare more than 40 lenders, including Commonwealth Bank, ANZ, NAB, Macquarie, ING and AMP, and match one to your loan, income and plan on four tests:
Policy and process can decide the outcome. In one of our case studies, a self-employed director's lending went to NAB because, at the time, it accepted director's salary annualised over six months. In another, a couple at Macquarie recycled a further $80,000 through online chat, with no new application.
Our lender guide sets out the questions to ask each lender in full.
Start with the loan you have. If it is variable and can split and redraw, your lender may be able to vary it. Moneysmart also suggests asking your current lender for a better deal before switching.
| Factor | Vary your current loan | Refinance to a new lender |
|---|---|---|
| What happens | Your lender splits or changes the existing loan | A new lender pays out the old loan and sets up new splits |
| Often suits | Loans that already split and redraw cleanly | Loans with no splits, costly splits, restricted redraw or unsuitable policy |
| Costs to count | Switch or variation fees, and break costs on fixed portions | Discharge and application fees, any stamp duty, break costs, and lenders mortgage insurance (LMI) if you have less than 20% equity |
Where moving is worth it, our page on refinancing for debt recycling covers the process and costs.
Releasing equity to invest is new borrowing, so the lender assesses your income, expenses and debts. Banks also apply a serviceability buffer, which the Australian Prudential Regulation Authority (APRA) has kept at three percentage points.
Borrowing to invest magnifies losses as well as gains, and your home is the security, so borrow an amount you could carry if markets or rates turn.
Lenders set their own document lists. A typical set:
We also ask how much you plan to invest and when, so the splits match the plan.
Our debt recycling mortgage brokers handle the loan from first review to settlement.
We check your splits, fixed terms, fees and redraw history.
We set each split's size, rate type and repayment type around your advisers' plan.
We compare lenders on our panel, lodge the application or variation, and manage it through to settlement.
You receive each split's account number and purpose to check with your accountant before the first redraw.
We arrange the lending only. Investment advice comes from your licensed financial adviser and tax advice from your registered tax agent, and we work alongside both.
A debt recycling home loan is an ordinary loan with the right settings: separate splits, usable redraw, sensible fees and a lender whose policy fits your plan. Check what your current loan can do before paying to switch.
We compare lenders, set up the splits and manage the application. Your accountant and financial adviser look after the tax and investment decisions.
Book a free call and we will tell you whether your current loan can recycle as it is, or what would need to change.
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No. It is a standard home loan, usually variable, set up with separate splits and redraw. What matters is the setup and the lender's policy.
Often, yes. If your loan is variable and allows splits and redraw, your lender may be able to vary it, which can cost less than refinancing.
It can be, because interest-only keeps the deductible balance steady. It can also cost more over the life of the loan, so agree the choice with your accountant and adviser.
On the home split. Money in an offset is your own cash, so it belongs against the home debt, which isn't deductible.
It depends on the lender, the change and your documents. Two of our published case studies were approved in two business days.
It helps. We don't recommend investments, so the amount and type should come from your licensed financial adviser, and your accountant confirms the tax treatment.
Use our debt recycling equity calculator to see your current LVR, usable equity under an 80% limit, and how much you could consider recycling.
Read more → SERVICEHow a debt recycling loan is structured: the splits, sub-accounts and redraw setup that keep your deductions clean. Done for you by a specialist broker.
Read more → SERVICEYour current loan may not recycle cleanly. We refinance to a split-friendly lender so debt recycling works from day one, without adding to total debt.
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.
Next Step
Talk it through with Alex
Bring a rough picture of your home loan, income and savings. You will come away knowing whether the lending side looks workable.
Free, no-obligation call · We call back within 1 business day
Prefer to talk now? Call 0438 376 200
