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Home Loan Calculator — Repay vs Invest vs Debt RecyclingAustraliaAU

Compare three strategies for your Australian home loan: making extra repayments, investing surplus cash, or using debt recycling. Instantly see the impact on loan balance, interest paid, tax outcomes, and long-term wealth — using your own numbers.

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ExampleRepayInvestDebt recycleCompareImportantFAQs

Loan Details

$
Enter the interest rate you want to model (assumption).
$
Optional: extra repayment amount to model.
How often to apply the extra repayment in the model.

Loan Balance Over Time

Original loan

This calculator assumes Principal and Interest repayments only.

What is an Amortization Schedule?

This schedule shows how your mortgage balance decreases over time, with each payment split between principal and interest. Early payments are mostly interest, while later payments are mostly principal.

Illustrative example (estimated)

This example shows how extra repayments can change the modelled schedule under the assumptions shown. Results depend on the inputs you enter.

Example inputs: $50 extra per week

With a $500,000 Home Loan at 5.79% interest, adding $50 extra per week produces an estimated interest difference of about $100,000 and an estimated term difference of about 5 years in this model. Results are illustrative and will vary with your inputs.

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Repay (extra repayments)

Repay early scenario applies extra repayments on top of regular Home Loan repayments. In the model, extra repayments reduce principal sooner, which can change the estimated loan term and total interest based on your inputs.

This is a modelled outcome using the rates and assumptions you enter.

How it works:

  1. Make the regular repayment
  2. Apply an extra repayment amount
  3. Principal reduces faster in the model
  4. Schedule updates based on inputs

Modelled outputs shown:

  • Estimated interest and fee totals
  • Estimated payoff timing
  • No investment component in this scenario
  • Side-by-side comparison with Invest adn Recycle
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Invest (surplus invested separately)

Invest Scenario keeps Home Loan repayments unchanged and models investing surplus cash separately. No redraw and no deductible interest benefit are assumed. Investment returns and tax outcomes are illustrative and based on the assumptions you enter.

How it works:

  1. Make regular repayments
  2. Allocate surplus cash to a modelled investment portfolio
  3. Apply the user-entered return assumption
  4. Estimate CGT using the selected tax rate (illustrative)

Modelled outputs shown:

  • Estimated portfolio value and estimated CGT
  • Estimated net difference vs standard repayments
  • Loan schedule remains based on standard repayments
  • Side-by-side comparison with Repay and Recycle scenarios
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Debt recycling (redraw + invest)

Debt recycling is a process where extra repayments are redrawn and invested. The Recycle scenario models that mechanism and applies simplified tax assumptions using the selected tax rate. Outcomes shown here are illustrative only.

Invest scenario keeps Home Loan repayments unchanged and invests surplus cash separately, with no redraw or deductible interest benefit.

Investment assumptions (illustrative)

Investment returns are user-entered assumptions. Investments can fluctuate in value and returns are not guaranteed. This tool does not recommend assets or allocations.

How it works:

  1. 1. Pay extra into your Home Loan (modelled)
  2. 2. Redraw the same amount (modelled)
  3. 3. Invest the redrawn amount (modelled)
  4. 4. Estimate deductible interest and CGT using the selected tax rate (illustrative)

Modelled outputs shown:

  • Estimated deductible interest and estimated tax benefit
  • Estimated portfolio value and estimated CGT
  • Estimated net difference vs standard repayments
  • Side-by-side comparison with Repay and Invest scenarios
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Scenario comparison (side-by-side)

Repay

  • Extra repayments applied to the loan balance (modelled)
  • No investment component in this scenario
  • Estimated interest and payoff timing differences
  • Uses your loan inputs and repayment assumptions

Invest

  • Standard loan repayments maintained
  • Surplus cash invested separately (modelled)
  • Estimated CGT uses the selected tax rate
  • No redraw or deductible interest benefit assumed

Debt recycling

  • Extra repayments followed by redraw for investment (modelled)
  • Assumes a redraw facility is available
  • Estimated deductible interest uses the selected tax rate
  • Investment returns are hypothetical inputs

These scenarios are shown side by side for comparison only. No ranking or recommendation is provided.

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Important Information

Before You Start

General information only: This calculator provides educational scenario modelling and does not consider your objectives, financial situation, or needs. It is not financial advice.

No credit advice: This tool does not provide credit advice or credit assistance, and does not assess eligibility, suitability, or lending terms.

Tax estimates only: Tax-related outputs are simplified and estimated for illustration. This tool is not a tax agent service and does not provide tax advice.

Assumptions: All rates, returns, and tax rates are user-entered or hypothetical. Outputs are illustrative estimates only.

Scenario assumptions: Recycle assumes a redraw facility; offset accounts are not modelled. Invest assumes no redraw or deductible interest benefit.

Investment risk: Investment values can rise or fall and returns are not guaranteed.

References

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Frequently Asked Questions

This calculator allows users to explore and compare different repayment and investment scenarios by modelling how changes such as extra repayments or alternative structures may affect estimated loan duration and interest outcomes over time. It presents side-by-side illustrations showing how varying assumptions can influence projected interest costs and loan timelines. All figures are illustrative estimates based on user-entered or hypothetical inputs and are provided for educational purposes only.
Debt recycling is a commonly used financial structuring concept that involves redirecting borrowed funds over time, typically by reducing non-deductible home loan debt and increasing exposure to investment-related borrowing. In general terms, this may involve making additional repayments on a home loan and then separately borrowing funds for investment purposes, subject to lender terms and individual circumstances. This calculator models hypothetical scenarios to illustrate how different assumptions may affect loan balances, interest costs, and cash-flow outcomes over time. Any tax-related figures shown are illustrative only and do not assess deductibility or suitability.
The amount of any additional repayments depends on individual circumstances and preferences. This calculator does not recommend repayment amounts or strategies. It allows users to explore hypothetical scenarios by adjusting extra repayment values to see how different assumptions may affect estimated loan duration and interest outcomes over time. Even relatively small changes can materially alter projected results, which the calculator illustrates for comparison purposes only.
Debt recycling involves a range of potential risks, including investment market volatility, changes in interest rates, and cash-flow pressure associated with ongoing loan obligations. Investment values can fluctuate and outcomes are uncertain. This calculator presents hypothetical illustrations of how different assumptions may affect projected balances and cash-flow outcomes. It does not assess suitability, explain how to implement debt recycling, or guarantee returns. Users should seek independent professional advice before making decisions involving borrowing or investing.
This calculator is based on a set of simplified, hypothetical assumptions to support general scenario modelling. These may include assumed loan structures and ownership status, as well as user-selected or default input values. Where tax or investment-related figures are shown, they are illustrative estimates only, based on simplified representations of publicly available information and hypothetical return assumptions. Default investment rates are provided solely as placeholders and can be adjusted by the user. The calculator does not reflect all real-world variables and does not provide financial, credit, or tax advice.
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