Restructuring a $925K Loan for Debt Recycling

The Borrower

Clients — “Steph and her partner”

Couple in their early 50s (teachers, regional NSW)

Lending

~$925K home loan

Investments

~$230K share portfolio

The Objective

• Separate investment borrowing from owner-occupied debt.
• Keep paying down non-investment home debt while growing the share portfolio.
• Run debt recycling as an ongoing strategy into retirement.

The Challenge

A $200,000 top-up used to buy shares had been set up as part of the owner-occupied loan, so investment and home debt were blended together.

What They’d Tried

They approached their existing bank, which couldn’t deliver the structure they wanted. Researching debt recycling online is how they found us.

What We Identified

This needed a clean split between home and investment lending, not a single refinance of the $925,000.

The Solution

• Cash in ~$200,000 of shares and pay the home loan back down to ~$725,000.
• Refinance to Macquarie and establish a separate ~$295,000 investment split.
• Reinvest the $200,000 plus a further $95,000 through that clearly separated split.

The Result

The restructure was approved (settlement to follow), creating a cleanly separated investment split. They accepted a ~0.10% higher rate to get the right structure. The deductibility of the investment split is subject to their accountant confirming their position.

What Happens Next

The arrangement is reviewed roughly yearly, converting further owner-occupied debt into properly structured investment lending over time as they approach retirement.

Why It Matters

The lowest headline mortgage rate isn’t the point — a clean split between home and investment debt is what makes debt recycling work.