If you are an investor looking for an alternative fixed income investment or for a way to participate in the Canadian real estate market, mortgage investment may be a viable option. In a private mortgage investment, an investor or a group of investors act as the lender to provide money to a borrower for various purposes including buying a house, refinancing a mortgage, renovating a property, or even acquiring and developing a property. As a part of the financing arrangement, the lender takes a mortgage charge against the property (among other securities) to secure his/her investment. The lender is also entitled to receiving monthly interest payments until the borrowed money is returned to the investor at the end of loan term. Many investors find private mortgage investments to be an attractive and secure way to receive passive income while diversifying their investments away from public securities such as bonds and stocks.

Historically, the most common way for individual investors to participate in a mortgage investment was through investing in a syndicated mortgage, a financing arrangement which allows multiple investors to participate in a mortgage loan. However, a syndicated mortgage can be simple, such as refinancing mortgage on a home, or it can be highly complex, such as financing a large-scale real estate development project. Many retail investors participate in syndicated mortgages without fully understanding the risks as they do not have the expertise to assess the risks associated with such investments and are often left in the dark when a mortgage loan does not proceed as expected. As a result, investment vehicles such as mortgage investment corporations (MICs) and mortgage mutual fund trusts (MFTs) have become the more preferred options for mortgage investing for the everyday investor.