South Melbourne office Ground Floor, 68-72 York Street, South Melbourne VIC 3205
Phone (03) 8548 6454
29+ Years advising Australians
6,000+ Clients across the country
$3.8B Funds under advice
8 Offices nationally
— Debt recycling in South Melbourne
A wealth-accumulation strategy for Melbourne clients.
Debt recycling is a strategy that converts the non-deductible interest on your home loan into deductible interest on an investment loan, while paying the home loan down faster. Total debt doesn't rise; the tax treatment and long-term composition of that debt does.
For Melbourne professionals with meaningful home equity, stable surplus income and a decade or more of investment horizon, the after-tax outcome can be meaningful. But debt recycling has real risks: investment loss, interest-rate rises, tax-rule change, and any interruption to income. The strategy has to be built around all of them, not just the tax benefit.
AGS advises from South Melbourne, with financial planning and mortgage broking working together on debt recycling. That coordination is where most of the execution risk sits, so we handle it directly rather than leaving you to broker between three separate firms.
— What we do
How we help What the strategy involves
Strategy design
Modelling the after-tax outcome, target loan split, contribution pace and investment mix that fits your goals and risk position.
Learn more →Loan structuring
Refinancing into a principal-and-interest home loan plus a separate investment loan, with the right lender and terms for a Victorian borrower.
Learn more →Investment plan
Choosing the investment vehicle and asset allocation so the borrowed funds actually work toward your longer-term goals.
Learn more →Risk cover review
Reviewing life, TPD and income protection so a health event doesn't unwind the strategy. Often the weakest link in a debt-recycling plan.
Learn more →Tax coordination
Setting up so the interest deductions are clean each year, with your AGS accountant working directly with the planner and broker.
Learn more →Long-term integration
Building debt recycling into the broader retirement plan, including how the portfolio transitions into retirement income.
Learn more →— Local knowledge
Debt recycling in Melbourne.
The strategy tends to suit Melbourne clients who have built equity in an inner or middle-suburb home, earn a professional or business income, and have a decade or more before retirement. We work with clients from South Melbourne, Port Melbourne, Albert Park, St Kilda, Prahran, South Yarra, Windsor, Toorak and across Victoria more broadly, by phone and video where face-to-face isn't practical.
Debt recycling doesn't suit everyone. If your cashflow is already tight, or your income protection and life cover are light, borrowing against the mortgage to invest adds risk. It's the wrong move too if you might sell within a few years, because the strategy needs a long run in the market to pay off. When paying the loan down the ordinary way is the better call, our Melbourne team will tell you.
Book a free initial discussion— Also in South Melbourne
One team, every service.
Financial planning in South Melbourne
Retirement, wealth creation, super and insurance advice.
Learn more →Mortgage broking
Refinancing, investment lending and structuring across a large lender panel.
Learn more →SMSF advice in South Melbourne
Self-managed super strategy, administration and compliance.
Learn more →— Questions answered
Debt recycling in South Melbourne
— your questions.
Can't find what you need? Call us on (03) 8548 6454.
Is debt recycling actually a good idea for me?
It comes down to four things: your marginal tax rate, your surplus cashflow, your investment horizon, and your risk comfort. For a Melbourne professional with real home equity and at least a decade before retirement, the numbers often work. If cashflow is tight, risk cover is thin, or the horizon is short, it usually doesn't. The first free discussion answers that question specifically for you before any strategy is designed.
Do I have to invest in shares, or can I invest in property?
Debt recycling is about how the interest on your borrowing is treated for tax, not what you invest in. You can debt recycle into shares, managed funds, or an investment property, or a combination. Investment property adds specific risks (concentration, illiquidity, tenants, maintenance) that a diversified portfolio does not, and different lenders view each purpose differently. Our Melbourne team advises on either approach and helps you decide.
Can AGS handle the loan and the investment side, or just the advice?
Both. Our South Melbourne office has the planners and works directly with AGS's mortgage broking team, so the split-loan set-up, the investment plan and the tax treatment sit inside one firm. That coordination is where debt recycling execution most often goes wrong when clients try to broker across separate providers.
What are the risks I need to plan around?
The main risks are investment loss (borrowed funds still need to be repaid), interest-rate rises tightening cashflow, tax-rule change reducing the deduction's value, and a health or job event interrupting your income. None of these rule out the strategy, but each has to be planned around. Insurance review, cashflow buffer sizing and a realistic horizon are the standard safeguards we work through with each client.