Debt recycling is a financial strategy that allows you to use your mortgage, the equity in your home and your current income to invest in an asset that will produce an income (like an investment fund, shares or property).
Of course, there are a few prerequisites:
- Is the value of your mortgage currently less than 80% of the value of your home?
- Do you have at least 20% equity in your home?
- Do you have time on your side – a long-term investment focus?
- Do you have a consistent reliable income?
- Are you comfortable holding debt?
- Do you have the discipline and tolerance to invest consistently over time?
If you answered yes to all of the above, then debt recycling might just work for you.
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