What is a MIC or Mortgage Investment Corporation?

Mortgage Investment Corporations (“MICs”) are entities allowed under Section 130.1 of the Canadian Income Tax Act. MICs allow individuals/shareholders to pool their money and invest their capital in mortgage loans, benefitting from the risk mitigation provided by a large, diversified portfolio.  

Reliable Mortgages Ltd. sources suitable mortgage investments, analyzes mortgage applications, negotiates applicable interest rates, terms and conditions, and instructs solicitors for the mortgage portfolio of Reliable Mortgages Investment Corp.  

Shares purchased in a MIC can be held in registered savings plans such as RRSP, RRIF, TFSA or as personal or business holdings. MICs distribute their income (earned by mortgages generating a yield through interest rates charged to borrowers) to shareholders by way of dividends. These dividends can be taken in cash/cheque or they can be re-invested as new shares in the MIC. Dividends are taxed as interest income of the shareholders unless the shares are held in trust accounts.