EP 030: Debt Recycling with Aaron Whybrow

As an investor, I’m sure you have heard every tip or trick to speed up the process…

If you’ve been in the game for some time now,
I can imagine nothing surprises you anymore…

So, today I’m going to test that! 😂

With the idea of: RECYCLING!

What if I said that there was a way to optimise the way you use debt?

Specifically non-tax-deductible debt
( the debt on your principal place of residence – PPOR)

Well, it’s a magical thing called Debt Recycling…
If used correctly, the advantages here can be an unlocker!

( I feel like a broken record… but…
This is not financial advice,
I don’t know your situation at all,
Speak to a profession before making any decisions )

So, to give you more context…

The interest portion of the mortgage payments I make on my investment properties are ‘Tax Deductible’.

In other words, I earn rental income on my investment property, deduct expenses (of which the interest payments are an expense) and I am left with the profit.

However, when I had a loan on my PPOR, the interest portion of my PPOR mortgage payment was a non-tax deductible expense – because it is NOT an investment but instead my place of residence.

Let’s use a real world example:

Say I own my own home and have $100k in cash.

Instead of using that $100k as the deposit for another investment property,
I instead add the $100k to pay down the mortgage I have on my PPOR…
Which will lower the amount of debt I have on my PPOR…
And thus, decreasing my Non-Tax Deductible interest payments.

Then, I redraw that $100k, using debt (speak to a financial expert), to then use as the deposit for a new investment property.

In effect, this now allows me to claim the interest payments on the new $100k debt as a ‘Tax Deduction’,
While also reducing my ‘Non-Tax-Deductible’ debt in the process.

If used under the correct circumstances…
(speak to your financial expert and/or mortgage broker)…
I have seen this save people tens of thousands of dollars and further accelerate the progression of their portfolio.

What to learn more?

In this week’s podcast episode, Grant and I are unlocking the secrets behind debt recycling as we speak with our resident mortgage broker, Aaron Whybrow…
So that you can explore if it’s possible to legally minimise your tax and build wealth faster!

We’ll be discussing:
– What is debt recycling?
– How effective is it?
– Who should and shouldn’t be using it
– As well as how it affects trust and more!

PS: So, have you heard of this before?

If so, have you actually used it to your benefit?


All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.

Episode Highlights:

00:00 Welcome to Property and Investing
03:28 Is it a busy time for Aaron? 
04:41 What is debt recycling?
09:10 Is debt recycling cross-collateralising assets? 
11:06 How effective is using debt that is non-tax deductible as a strategy?
13:12 Can you leverage debt recycling to buy a PPR?
15:23 Who shouldn’t use debt recycling? 
20:30 Is it possible to make a heap of tax-deductible debt non-tax deductible?
25:53 Better strategies to buy a PPR instead of debt recycling 
29:58 Holding on to assets isn’t always beneficial 
31:45 Impacts of debt recycling on investments that are in trusts

If you enjoyed this episode, please don’t forget to subscribe, tune in, and share this podcast!


About the Guest: 

Aaron Whybrow is the founder of Diagnostics and Finance, a Financial Broking and Personal Risk Insurance Business.

Diagnostics & Finance (ARW Financial Services Pty Ltd) is a Credit Representative 425540 of Finsure Finance & Insurance ACL 384704.

He is known as the ‘bagpiping mortgage broker’, who prides himself on having no ‘flats’ in his career. He blends his experiences as a former intensive care unit nurse and medical sales rep to provide the best outcomes for his clients.

To connect with Aaron and his team of mortgage professionals, head over to: https://propertyandinvesting.com/partners/diagnostics-and-finance/


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