What is a MIC?

MIC (pronounced “mic” as in the name Mick) stands for Mortgage Investment Corporation, which is an entity created under Canada’s Residential Mortgage Financing Act to use the power of mortgages to benefit:

  • borrowers
  • investors/advisors
  • brokers

Although MICs have become publicly known in recent years, the establishment of the legislation goes back to 1972, when the government wanted to make it easier for everyone to participate in Canada’s mortgage sector.

How does it work?

A MIC is much like a mutual fund for mortgages. The mortgage investment corporation (MIC) assembles of pool of mortgages. In essence, the MIC is an alternative provider of mortgages to borrowers having difficulty finding financing via traditional means.

The MIC administers all these mortgages, and makes a return based on the interest received in mortgage payments.

The MIC then turns to investors and offers them shares in the MIC in exchange for an agreed-upon schedule of payments that essentially constitute an alternative fixed-income investment.

Here’s a visual representation of how MICs work:

Why mortgages?

This is a very important question. The power of mortgages as an investment is that they are backed by the value of the underlying property itself, i.e., collateral, which makes mortgages a much safer investment than many other alternatives.

In addition, Canada’s mortgage industry is regulated, which provides even more protection for everyone involved.

What’s the benefit?

There are various benefits to the existence of a MIC.

For borrowers: You get access to alternative mortgages that aren’t available in traditional markets.

For investors/advisors: You get an option for your investment portfolio that provides relatively high rates of return with relatively low levels of risk.

For brokers: You get to offer clients another mortgage alternative provided by mortgage professionals such as ASCEND MIC.

A MIC is a Canadian financial entity that provides a Canadian solution to borrowers, investors/advisors and brokers in Canada’s well-established mortgages industry.

Talk to us to find out how ASCEND MIC can meet your financial needs today!