Debt recycling calculator
Debt recycling turns non-deductible mortgage interest into deductible investment interest — without borrowing any more than you already have. You pay a lump sum onto a split portion of your home loan, immediately redraw it, and invest it in income-producing assets.
Same debt, same investment, less tax.
If that's new to you, start with the full guide first — it covers how it works, the structuring, and a long list of risks that most people discussing debt recycling online never mention.
→ Debt recycling in New Zealand: the complete guide
If you already know how it works, the calculators are below.
Debt recycling calculator
Work out how much of your mortgage you can recycle, how long it will take, and how much additional tax-deductible interest you'd have each year.
Debt recycling vs not recycling vs paying down the mortgage
The comparison version. Runs all three approaches side by side so you can see what recycling is actually worth to you over your timeframe — and, just as importantly, whether paying down the mortgage beats both.
Full workings are on the second tab if you want to see how the numbers come together.
What you'll need before you start
Have these to hand:
Your mortgage balance, interest rate and remaining term
How much you're able to invest each year
Your marginal income tax rate
Your investor tax rate — note that if you're in a PIE fund, this differs from your income tax rate
An expected investment return, after fees, tax and dividends
That last one is the awkward one. The calculator can't work out your investment tax liability for you — it depends on whether you're in a PIE, whether you hold NZ shares with imputation credits, whether you're liable for FIF tax, and how much your investments pay in dividends. Make a conservative estimate and enter a return that's already net of it.
1.4% (5% of 28%) is a common example as that captures higher earners in a PIE fund investing internationally.
The order of the decision matters
Debt recycling is a tax decision. It sits after the investment decision, not before it.
Work out whether you're better paying down the mortgage or investing first — on cashflow, returns, diversification, timeframe and your actual goals. Only once you've decided to invest does debt recycling come into it, and only with money you were going to invest anyway.
Don't let the tax tail wag the dog.
Before you set this up
The strategy is legitimate, but it's genuinely easy to get wrong in ways that cost you the tax benefit or bring IRD scrutiny — mixing recycled and non-recycled loans, letting the money pass through accounts holding other cash, buying assets that don't produce income, or accidentally closing the split loan when you redraw it.
The risks section of the full guide covers the ones worth knowing about.
If you'd like help deciding whether this fits your situation, get in touch for a free 30 minute chat. No obligation.