Strictly speaking, borrowing to invest is a different strategy to debt recycling. Borrowing to invest could incorporate debt recycling, but it is really about borrowing extra money to invest over and above what you have already borrowed. Debt recycling, on the other hand, is about converting existing non-deductible debt into deductible debt. It doesn’t involve any additional borrowings. Example Bart has a home worth $1mil and an owner-occupied debt of $400,000. Bart borrows an extra $200,000 to invest in income producing shares. Loan A $400,000 Non-deductible Changes to Loan A $400,000 Non-deductible = still the same Loan B $200,000 Deductible $600,000 total Debt Lisa, on the other hand, wants to debt recycle and she has a home worth $1mil with a loan of $400,000 which is non-deductible. She also has $150,000 in the offset account and wants to invest in shares. Loan A $400,000 Non-deductible with $150,000 in attached offset Changes to Loan A $300,000 Non-deductible with $100,000 in attached offset Loan B $100,0000 deductible when drawn down to buy shares $400,000 total Debt Of course, borrowing to invest and debt recycling can be combined, and this is what Maggie does. She has a $1mil main residence with $400,000 owing on it and $150,000 in an offset account. She also wants to buy shares but wants $200,000 worth Loan A $400,000 Non-deductible with $150,000 in attached offset Changes to Loan A $300,000 Non-deductible with $50,000 in attached offset Loan B $100,0000 deductible when drawn down to buy shares Loan C $100,0000 $500,000 in total debt Maggie has used $100,000 to debt recycle as well as borrowing another $100,000 on top for further investments. She could potentially even combine loans B and C above.