Australians receive to $8,500 a year on their mortgage using this legal financial loophole

Are you an Australian with an active mortgage and not recycling your debt? Then you're making a big mistake! Hundreds of thousands of Australians are already using this financial loophole to not only save on tax payments but also generate income from investments. It may seem complicated, but we're here to help you understand.

How does it work?

Debt Recycling allows you to gradually replace your mortgage debt with investment debt, reducing your tax burden while building wealth. The process starts by making extra repayments on your mortgage and then borrowing against the available equity through a line of credit. The borrowed funds are invested in shares, managed funds, or income-generating property, with the loan interest becoming tax-deductible.

Investment returns can be used to further accelerate mortgage repayments. This cycle is repeated until all non-deductible debt is converted into investment debt, helping you lower taxes and and receive regular dividend payments.

Let’s explain with an example

Dave is an Australian with a $500,000 mortgage. Each year, he pays $50,000 towards his loan but hasn't been using opportunities to save. One day, he decides to try the Debt Recycling strategy. Dave pays down part of his mortgage, freeing up $50,000 in equity. He borrows that amount through an investment loan and starts investing in stocks and other income-generating assets. The interest on this loan becomes tax-deductible, allowing him to save on taxes. With a tax rate of 37%, the savings amount to $1,110. His investments generate $2,500 in income over the year, which Dave uses to pay down his mortgage. As a result, he saves on taxes and also earns income from his investments. In total, this gives him $8,500 in savings and profit. This strategy helps Dave reduce his tax burden while also growing his wealth.

What requirements do I need to meet in order to recycle my debt?

To be eligible to recycle your debt, you must meet certain requirements set by the banks that manage your debt. Make sure you meet these criteria:

• Be an Australian citizen;
• Be aged between 35 and 85;
• Have a stable income (employment, pension, or benefits);
• Be able to manage your finances.

If you meet most of these points, debt recycling will likely be available to you. However, the process requires a solid understanding of financial matters.

Seek Professional Advice

Interested in recycling your debt but feel like you might not manage it on your own? Don't worry, we can help! Rise High Financial Solutions has been specializing in debt recycling for 15 years and are experts in the field. We are ready to offer you your first consultation absolutely free.

To get in touch with an experienced financial consultant, follow these steps:

• Go to the website risehigh.com.au
• Select "Contact Us" at the bottom of the page
• Fill out the form and describe your situation
• Our specialists will review your case and contact you with an offer within the day

No obligations or overcharges — if you don’t like the consultation, we won’t charge you a cent.

Want to speak to the right specialist right away? Choose how much AUD $ you want to receive from your investment portfolio: