Mortgage Investment Corporation (MIC)

A mortgage investment corporation (MIC) is an investment and lending company that is designed for mortgage lending (primarily residential mortgage lending) in Canada. Owning shares in a mortgage investment corporation enables you to invest in a company which manages a diversified and secured pool of mortgages.

MICs are pools of capital which enable individual investors to gain direct access to the private Canadian mortgage market. MICs account for the bulk of private mortgage issuance and are regulated by OFSI (federal regulator of financial institutions), and they do not pay income tax given their corporate structure, which allows them to share their earnings with investors in the form of distributions. The Income Tax Act states that MICs cannot retain any earnings.

MICs usually hold the vast majority of their assets in high-yield, uninsured residential mortgages, although regulations allow them to hold up to 25% in physical real estate. Unlike banks, these pools of capital are generally lending for much shorter terms, with 6 to 24 months being the standard term length.