For long-time investor Peter Thornhill, using debt to his advantage has been the strategy through which he has built wealth. The 77-year-old has used the equity built up in the three homes he has subsequently owned in Australia since his return from working in London in 1988 to invest in the sharemarket and, he says, the result is that he paid off his mortgage “decades ago”.

The practice, known as debt recycling, involves paying down the non-tax-deductible home loan debt on your principal place of residence, either in full or substantially, and then borrowing against it at home loan interest rates to buy investment assets, such as a property or shares, thereby turning non-tax-deductible debt into debt that is tax deductible.