MIC Education Center
Understanding Mortgage Investment Corporations (MICs)
What is a MIC?
A Mortgage Investment Corporation (MIC) is a unique Canadian investment vehicle that allows individuals to pool their capital to invest in a diversified portfolio of mortgages. MICs provide a professionally managed, secure way to earn consistent returns backed by real estate assets without the challenges of direct property ownership.
Key Benefits of Investing in a MIC
- BenefitHigh-Yield Income – Earn 8-12% annually (historically higher than GICs or bonds)
- BenefitReal Estate Security – All loans are backed by registered mortgages on Canadian properties
- BenefitTax Efficiency – MICs are flow-through entities (no corporate tax; dividends taxed as interest income)
- BenefitRRSP/RRIF Eligible – Hold MIC shares in registered accounts for tax-deferred growth
- BenefitNo Landlord Duties – Avoid property management hassles while benefiting from real estate returns
How MICs Work
1. Capital Pooling
- • Investors purchase shares (minimums typically $50K+)
- • Funds combined with potential bank leverage (max 2:1 debt-equity)
2. Mortgage Portfolio Creation
- • Professional managers source loans (residential/commercial)
- • Maintain 65-75% loan-to-value ratios
- • Handle all servicing/collections
3. Income Distribution
- • 100% of net interest income paid to shareholders
- • Dividends taxed as interest income
- • Monthly or quarterly distributions
Regulatory Framework
Income Tax Act Requirements:
- ✓Minimum 20 shareholders (no single investor >25% ownership)
- ✓≥50% assets in residential mortgages/CDIC-insured cash
- ✓≤25% in direct real estate holdings (excl. foreclosures)
- ✓Annual audited financial statements
Investor Protections:
- • Portfolio diversification by law
- • Professional audit requirements
- • OSC oversight (through Exempt Market Dealer)
| Feature | MIC (9%) | GIC (4%) | Dividend Stocks (5%) | REITs |
|---|---|---|---|---|
| Annual Income | $9,000 | $4,000 | $5,000 | $5,000-$8,000 |
| Principal Security | Mortgage-backed | Guaranteed | Market-Dependent | Unsecured |
| Liquidity | Annual Redemption | Term-Locked | Daily Trading | Daily Trading |
| Tax Efficiency | High | Medium | Medium | Mixed |
*Based on $100,000 investment. Returns are for illustration purposes only.
Frequently Asked Questions
Ready to Learn More?
Checkout our comprehensive MIC information package
MIC Investor Guide
Complete overview of MIC investing and benefits
Performance Reports
Historical returns and portfolio metrics
FAQ Document
Answers to common investor questions