You may already be a Mortgage Investor!
Most people are unaware that they are already an investor in the mortgage industry. But how can this be the case?
Banks use savings account deposits and Certificates of Deposit (CDs) to reinvest that money into the mortgage market.
As you know, returns are very small for savings account deposits; currently they are typically 0.25%, or close to zero. Some investment accounts offer rates of 2.25%. Certificates of Deposit provide higher returns that are about 3% at the time of writing.
The bank takes all these funds and lends them out at a
higher rate to people buying houses and real estate in the
form of mortgages. The mortgage rate might be 7-8%
The bank makes money based on the “spread” between
these rates. So the bank lending 7% on a mortgage and
paying 3% on deposits has a 4% spread. This spread is
the money the bank makes for this transaction. Of course
the bank has costs for their building, people, and other
costs to run and manage this business.
So, if the bank just takes your money and turns around and invests it in mortgages, making an additional 4%, then why would you not invest directly into mortgages?
Superior Track Record
Based on historic performance data, mortgage investments outperformed the Stock Market and most the Canadian Equity Funds:Average Annual Returns
| Period of Years | GIC | CSB | Mortgage Investments |
| 3 | 4.40 % | 2.85 % | 13.7% |
| 5 | 4.70% | n/a | 13.7% |
1. GIC refers to Guaranteed Investment Certificates
2. CSB refers to Canada Savings Bond
3. Mortgage Investments
Contact Us
924 The East Mall Suite 300
Toronto,Ontario,Canada
M9B 6K1
Phone: 1.877.879.6753
Fax: 416.621.3092
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