Mortgage Investment Corporations in Canada

Note: Stock return values are as of 6 November 2023

MCAN Financial Group

Minimum Investment: 1 share

Stock Symbol: MKP

Lending Focus: Urban (Ontario, Alberta, and Vancouver)

Property Type Focus:

• Single-family homes
• Construction
• Commercial

Formerly known as MCAN Mortgage Corporation, MCAN Financial Group is a publicly-traded MIC, trading on the Toronto Stock Exchange (TSX) under the ticker MKP. MCAN focuses on single-family residential lending, but they also offer mortgage loans for construction and commercial properties. They operate their own mortgage lender, called MCAN Home Mortgage Corporation, to lend out residential mortgages.

MCAN funds some of their mortgages through deposits they receive in their CDIC-eligible term deposits at MCAN Wealth. MCAN term deposits are eligible for CDIC deposit insurance and are non-redeemable term deposits. They require a minimum deposit of $10,000 for terms of less than 1 year, and $5,000 for terms of 1 year or longer. MCAN uses the funds that they receive from depositors as a way to fund their mortgages.

MCAN refers to the difference between what they pay depositors and what they receive by lending out mortgages as the spread of mortgages over term deposit interest and expenses. In 2023, that spread was 3.5%.

Data as of September 2023

MCAN Mortgage Types

MCAN Average Mortgage Rates

MCAN Mortgages by Province

MCAN Mortgage Amortization Periods

MCAN Data Source: 2021 Annual Report

Note: Stock return values are as of 6 November 2023

Atrium Mortgage Investment Corporation

Minimum Investment: 1 share

Stock Symbol: AI

Lending Focus: Urban (Ontario, British Columbia)

Property Type Focus:

• Residential
• Commercial

Atrium Mortgage Investment Corporation focuses on residential properties in major Canadian urban centres, namely the Greater Toronto Area (GTA) and Vancouver. They also operate outside of the GTA in Ontario, as well as other areas of British Columbia and Alberta. In addition to first mortgages, they also have a small portfolio of second and third mortgages, as well as commercial mortgages.

Atrium has been paying out monthly dividends, uninterrupted, since 2001. They also pay out a special dividend each February to ensure that 100% of the MIC's net earnings are paid out to shareholders, allowing Atrium to avoid paying any income taxes.

Focused primarily on residential, 88.5% of Atrium mortgages are residential, and 11.5% are commercial. Mid-rise and high-rise residential make up the majority of Atrium's investment portfolio. Atrium's average mortgage was $3.6 million, although most Atrium mortgages are under $2.5 million.

Data as of August 2023

Atrium Mortgage Types

Atrium Average Mortgage Rates

Atrium Mortgages by Province

Atrium Average Mortgage Rates by Province

Atrium Data Source: August 2022 Investor Fact Sheet

Cannect Mortgage Investment Corporation

Minimum Investment: $10,000

Annual Management Fee: 2%

Exempt Market Dealer: Meadowbank Asset Management

Lending Focus: Ontario

Property Type Focus:

• Residential
• Commercial
• Construction

Cannect Mortgage Investment Corporation is a relatively new MIC, having been in operation for ten years. Cannect focuses mainly on Toronto and the GTA and is a private MIC. This means that you can’t buy shares of Cannect on the stock market. Instead, you'll need to open a Cannect Invest account, with a minimum deposit requirement of $10,000. Investors can open their account online. This includes non-registered accounts, TFSAs, RRSPs, RRIFs, RESPs, joint and business accounts. Cannect Invest registered accounts use Central 1 Trust Company as the trustee.

There might be limits to how much you can invest with Cannect, based on what type of investor you are. Accredited investors have no investment limits, eligible investors can invest up to $30,000, and non-eligible investors can invest up to $10,000. A higher limit of $100,000 applies to investors who receive advice from a portfolio manager, investment dealer, or exempt market dealer (EMD). Meadowbank Asset Management is used as Cannect's EMD.

Cannect positions itself by having a "unique" approach, where they go directly to investors to raise money, they go directly to consumers to lend out money, and they maintain a low loan-to-value (LTV) lending ratio.

Cannect has a larger second mortgage portfolio than other MICs. 40% of Cannect mortgages are second mortgages. However, Cannect also has a lower LTV ratio which reduces its risk.

Cannect MIC charges an annual 2% management fee. They also charge additional fees if you withdraw your investment early. If you withdraw within the first 12 months, you'll be charged a 5% fee. As a private MIC, it also takes time to receive your money. With Cannect, it can take 30 days to withdraw your money.

Cannect Mortgage Types

Cannect Mortgage Rates

Data from Offering Memorandum

Cannect Mortgages by Province

Data from Offering Memorandum

Cannect Mortgage Position

Cannect Data Source: Offering Memorandum and Cannect

Canguard Mortgage Investment Corporation

Minimum Investment: $10,000

Annual Administration Fee: 1.5%

Exempt Market Dealer: Kite Financial Solutions Ltd.

Lending Focus: British Columbia

Property Type Focus:

• Residential
• Commercial
• Construction
• Agricultural

Canguard is a private, open-fund mortgage investment corporation that operates within British Columbia only, with a particular focus on mortgages in Surrey/White Rock and Vancouver. Just over 50% of their mortgages are residential, as required by the Income Tax Act, with a significant number of residential land development and construction loans. They also have commercial and agricultural mortgage loans. While Canguard isn't diversified geographically across Canada, they do spread their investments across British Columbia and in many mortgage types.

Canguard only invests in secured mortgages with a maximum LTV of 75%. Its average mortgage term length is 15 months, with most being 1st mortgages. In 2022, 3.82% of the MIC's mortgages were in foreclosure.

As a private mortgage lender, Canguard has no minimum credit score requirement, no maximum debt service ratio (GDS/TDS) limits, and allows interest only payments. They also allow stated income, which means that borrowers, such as those that are self-employed, do not need to provide proof of income. Canguard charges a lender fee of 1% to 2% to borrowers for terms of 1 to 2 years.

For investors, Canguard charges an annualized administration fee of 1.5%, paid monthly. Investors also do not receive any loan fees, which are usually 1% to 2% of the mortgage principal.

For those looking to open a registered RRSP or TFSA account to invest with Canguard MIC, the trustee is Olympia Trust Company. Only BC residents can invest in Canguard.

Canguard Mortgage Types

Canguard Mortgages by Area

Canguard Mortgages by Province

Canguard Mortgage Position

Canguard Data Source: Offering Memorandum and Canguard

Firm Capital Mortgage Investment Corporation (FCMIC)

Minimum Investment: 1 share

Stock Symbol: FC

Lending Focus: Ontario

Property Type Focus:

• Residential
• Commercial

Firm Capital (FCMIC) is a public MIC traded on the Toronto Stock Exchange under the stock symbol FC. One of Firm Capital's main objectives is to provide a return that is 400 basis points greater than 1-year Government of Canada treasury bill yields. They do this by having an investment portfolio with an average rate of 11.1% as of September 2023, allowing for a trailing yield of over 9%.

Firm Capital focuses on Southern Ontario, with 95% of their mortgages being variable mortgages and 76% maturing within 12 months, with an LTV of less than 75%. They've been operating their mortgage investment portfolio since October 1999.

54% of Firm Capital's portfolio is within the Greater Toronto Area (GTA). 33.5% is in Ontario outside of the GTA, with a small number of mortgages in Quebec, Western Canada, and the United States.

Firm Capital Mortgages by Province

Firm Capital Mortgage Position

Firm Capital Data Source: Annual Report and Investor Presentation

RiverRock Mortgage Investment Corporation

Minimum Investment: $150,000 ($25,000 for accredited investors)

Annual Administration Fee: 1.25% Series F (2.25% Series N)

Exempt Market Dealer: Donville Kent Asset Management Inc.

Lending Focus: Ontario

Property Type Focus:

• Residential

RiverRock MIC focuses only on residential mortgages in Ontario, mainly as an alternative lender to newcomers to Canada, those with a bad credit score, and self-employed borrowers. All RiverRock mortgages have a term length of 1 year, with a maximum LTV of 80%. RiverRock has a higher average LTV in its portfolio than other MICs, with an average LTV of 68%.

For investors, RiverRock requires at least a 1-year hold before you can redeem your shares and withdraw your investment. After the initial 1-year hold, you can redeem class A shares quarterly. While for class A1, F and N, 6 months notice is required. This makes RiverRock less liquid than other open-end MICs, which might only require 30 days to redeem. RiverRock also requires a minimum investment of $150,000 from non-accredited investors or $25,000 from accredited investors.

RiverRock Mortgage Types

RiverRock Mortgages by Area

RiverRock Mortgage Maturities (Remaining)

RiverRock Data Source: Investor Fact Sheet and RiverRock

CMI MIC

Minimum Investment: $5,000

Annual Management Fee: 1%

Exempt Market Dealer: Corton Capital

Lending Focus: Urban

Property Type Focus:

• Residential

Canadian Mortgages Inc. (CMI) offers three different MIC portfolios based on risk level. In all cases, CMI invests in urban residential properties within Ontario, British Columbia, Alberta, Nova Scotia, and Newfoundland & Labrador. CMI is a private MIC, and requires a minimum investment of $5,000. They charge an annual management fee of 1% across all of its portfolios. They also charge a 20% performance fee, which is 20% of the return over a specified target each year.

CMI's Prime Mortgage Fund is for conservative investors that want to minimize volatility. CMI does this by limiting mortgage LTVs to 65% and investing in first mortgages. This fund has a lower annual return of 6% to 7%.

CMI's Balanced Mortgage Fund invests in a mix of first and second mortgages, with a higher max LTV of 75%. This gives higher returns of 8% to 9% for investors that want a little more risk in return for possibly higher returns.

CMI's High Yield Opportunity Fund is meant for aggressive investors willing to take on risk. It invests in second mortgages, a high LTV cap of 85%, and a target annual return of 10% to 11%.

The CMI MIC Prime Mortgage Fund is the newest, having started in July 2020. All funds allow for quarterly redemptions.

CMI Mortgages by Province

CMI Data Source: CMI

AP Capital MIC

Minimum Investment: $10,000

Annual Management Fee: 1.5%

Exempt Market Dealer: Diversifi Alternative Investments Ltd

Lending Focus: Western Canada

Property Type Focus:

• Residential

AP Capital MIC focuses on urban markets in Western Canada, mainly British Columbia and Alberta, with mostly residential first mortgages. Specifically, they look for single-family detached homes in Vancouver and the Fraser Valley. The majority of AP Capital's mortgages are for non-owner occupied homes. These might be second homes or investment properties.

AP Capital is a private MIC and requires a $10,000 minimum investment. Redemptions require 60-days notice. AP Capital charges an annual management fee of 1.5%. Due to the nature of BC’s housing market, AP Capital’s average mortgage size is larger than other MICs operating in other provinces.

Most investors with AP Capital have non-registered (cash) accounts, at 70% of investors. 30% of investors have a registered account. AP Capital also offers a dividend reinvestment plan (DRIP), which 44% of investors use. 56% of investors have opted to receive monthly cash distributions instead of automatically re-investing. As of September 2023, 5% of their mortgages were in foreclosure.

AP Capital Mortgage Types

AP Capital Mortgages by Province

AP Capital Data Source: Offering Memorandum and Fact Sheet

Timbercreek Financial

Minimum Investment: 1 share

Stock Symbol: TF

Annual Management Fee: 0.85%

Lending Focus: Across Canada

Property Type Focus:

• Multi-Residential
• Commercial

Timbercreek Financial is a publicly-traded private lender with a strong focus on income-producing properties, such as multi-residential and commercial properties. This is reflected in its average mortgage size of $10.5 million. Timbercreek is a large corporation with $3 billion in assets under management. In addition to being an MIC focused on urban,, income-producing properties, Timbercreek Capital originates mortgages in the United States, Ireland, and the United Kingdom as well.

The average mortgage rate in Timbercreek's portfolio is 7%, with 87% of Timbercreek's mortgages having a floating (variable) interest rate. Timbercreek says that they invest in commercial mortgages to enhance their portfolio yield. This is seen with 89.3% of their mortgages being to income-producing properties, with 64.9% being multi-residential properties.

Timbercreek Financial Data Source: Financial Report and Fact Sheet