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Debt Recycling - How? or a better strategy??

Discussion in 'Investing Strategies' started by Jays2007, 15th Jul, 2016.

  1. Jays2007

    Jays2007 Member

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    Location:
    Sydney, NSW
    Hi There,

    I was wondering if there was a better solution to my problem?
    Any advice would be very appreciated.

    I had a $90k equity loan on my PPOR funding part of an investment property.
    I have an investment loan for the remaining amount on the investment property. Property purchased about 3 years ago with equity of approx. $100k.
    Long story but when I sold my PPOR the equity loan got payed out by sale proceeds.

    I am soon to purchase a new PPOR, my home loan will be an extra $90k larger and that portion is not tax deductable (non investment related).

    Is there a way of paying the PPOR down $90k and making it tax deductable?

    I know of Debt recycling by capitalising investment costs (ex interest) and paying down PPOR debt with rental funds but this is a slow process.

    Are there other options / advice that may help?
     
  2. Terryw

    Terryw Well-Known Member

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  3. Jays2007

    Jays2007 Member

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    Location:
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    As I mentioned in the original post the loan has already been paid out
     
  4. Terryw

    Terryw Well-Known Member

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    Sydney
    In that case you have made a costly mistake.

    Interest on $90k would be around $4500 per year. This means you will have $4500 less tax deductions for the next 20 to 30 years.

    no way to rectify this now.

    All you can do is some debt recycling. Borrow to invest and use the proceeds to pay down the loan on the new PPOR, keep repeating.
     
  5. Jays2007

    Jays2007 Member

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    I am aware of the situation I am in. As per my original post I am after some advice or ideas that others may have done. Thanks
     
  6. Terryw

    Terryw Well-Known Member

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    You can't unscramble an omelette.
     
    Phil82 likes this.
  7. Jays2007

    Jays2007 Member

    Joined:
    15th Jul, 2016
    Posts:
    5
    Location:
    Sydney, NSW
    I am aware of the situation I am in. As per my original post I am after some advice or ideas that others may have done. Thanks