Debt recycling is a strategy helping ordinary Australians pay off their home loans far sooner than ever thought possible.
How Does It Work?
Jack and Kate have a home loan of $350,000 with a 5% interest rate paying $500 a week. Jack earns $80,000 a year and their home value is $500,000. They are wanting to build wealth for the future and pay off their home loan as soon as possible. They can budget $300 a week towards the Debt Recycling Strategy.
Using this Strategy Jack and Kate have paid off their home loan in 10 years, over 10 years before they would have done without using the Debt Recycling strategy. Jack and Kate will also have built a net investment portfolio which after 20 years will be worth nearly $750,000. If they wished they could pay the investment loan off earlier using the money previously used for the Home loan. Over the 20 years Jack created additional tax savings of over $160,000, an average of $8,000 a year.