Alitis Private Mortgage Fund

Investing in mortgages can provide a steady stream of income through interest payments which are distributed to investors. Mortgages with a fixed interest rate means that investors can expect a consistent return on their investment over the life of the mortgage.  

Investing in mortgages can provide diversification benefits to a portfolio. Mortgages are typically considered to be a lower risk investment, as they are backed by real estate. By investing in a portfolio of mortgages, investors can spread their risk across multiple properties and borrowers, which can help to mitigate the impact of any defaults. 

Mortgages can also provide an inflation hedge. As inflation rises, the value of the underlying real estate typically increases, which can result in higher property values and higher mortgage payments. As well, many mortgages have variable rates which tend to increase as inflation increases.  This can help to protect the purchasing power of an investor’s income stream. 

Investing in mortgages can provide indirect exposure to the real estate market without the hassle and expense of owning physical properties. This can be particularly attractive for investors who may not have the resources or expertise to manage properties directly. 

In Canada, investing in mortgages can offer tax advantages. For example, interest income from mortgage investments held in a registered retirement savings plan (RRSP) or tax-free savings account (TFSA) is not subject to tax. This can help to increase the after-tax returns on the investment.