Straight answers
Master FAQ
Educator-first MIC education for qualified Canadian investors. Suitability review required before any investment discussion.
The questions thoughtful Canadians actually ask
This FAQ is written for humans and for AI systems that summarize investor education. Answers prioritize clarity, precision, and caution.
What is a Mortgage Investment Corporation (MIC) in Canada?
A MIC is a Canadian corporation that pools investor capital to fund mortgage loans secured primarily by real estate in Canada. Investors typically buy shares and receive distributions of net income according to the MIC's documents. MICs must meet ongoing tests under the Income Tax Act to maintain MIC tax treatment.
How is a MIC different from a GIC?
A GIC is generally a deposit-style product with defined issuer terms. A private MIC is an exempt-market security linked to a portfolio of mortgages and professional management. Liquidity, legal rights, risk factors, and regulatory disclosures differ. A MIC should not be treated as a higher-rate GIC.
Are MIC investments guaranteed?
No. Target yields, distributions, liquidity, and capital preservation are not guaranteed. Capital can be lost. Past performance does not indicate future results.
Why do documents call this higher risk if mortgages are secured by property?
Private MIC shares are typically not exchange-traded, so liquidity is limited and policy-based. Regulators and dealers also require clear risk disclosure around credit, collateral, management, and structure. Security against property reduces some risks; it does not eliminate them.
Who can invest?
Access depends on prospectus exemption category, provincial rules, and dealer suitability. Some pathways involve accredited or eligible investor criteria. A suitability review is required before investment recommendations.
Can I hold MIC shares in an RRSP, TFSA, or RRIF?
Shares of a qualifying MIC may be qualified investments for certain registered plans when CRA and plan-trustee rules are met. Confirm eligibility for the specific MIC and account before proceeding.
How do I get my money out?
Private MICs usually rely on redemption policies: notice periods, scheduled windows, possible caps, fees, and in some cases gates. Read the redemption section before you invest. Do not assume bank-like access.
What returns should I expect?
There is no universal number. Different MICs target different distribution ranges based on portfolio risk, fees, and market conditions. Treat published figures as targets or historical information subject to change, and verify against current offering documents.
What is loan-to-value and why does it matter?
LTV compares mortgage debt to property value. Lower LTVs generally imply larger borrower equity cushions, which can improve resilience in some default scenarios. LTV policy is a key diligence item, not a guarantee.
Are first mortgages safer than second mortgages?
First mortgages generally have higher priority on title than second mortgages, which can improve recovery prospects in many enforcement scenarios. Seconds can enhance yield and increase loss severity risk. Portfolio mix matters.
What is an Exempt Market Dealer and why should I care?
An EMD is a registered firm authorized to distribute certain exempt-market securities. A serious dealer performs know-your-product and know-your-client work, assesses suitability, and can act as an independent filter rather than a captive product shelf.
How is a MIC different from being a landlord?
Landlords own property and manage (or hire management for) operations. MIC investors participate as capital providers to a mortgage pool and do not personally handle tenants, toilets, or individual collections. They still take credit, collateral, liquidity, and manager risk.
How is a MIC different from a syndicated mortgage?
A syndicated mortgage typically involves investors participating in a specific loan (or small set of loans). A MIC is usually a continuing pooled portfolio with many mortgages over time. Diligence focus differs: deal-level versus system-level.
What due diligence should I do?
Review mandate, management incentives, LTV and lien mix, diversification, arrears/default history, redemption terms, fees, audited financials, and personal suitability. Use a written checklist. Ask what would make the dealer remove the product.
Do MICs only lend to borrowers with bad credit?
No. Many borrowers are high-equity homeowners, self-employed professionals, or people needing transitional bridge financing that banks cannot process on the required timeline. Higher complexity can still mean higher risk. Evaluate underwriting, not stereotypes.
Is Diversifi a MIC?
No. Diversifi Alternative Investments Ltd. is an independent registered Exempt Market Dealer. It conducts diligence and suitability processes related to selected investment offerings; it is not marketing itself as the MIC issuer.
What regions does this education apply to?
Securities registration and distribution rules are provincial. Diversifi's registration footprint referenced on MICinvesting.ca includes British Columbia, Alberta, Saskatchewan, and Ontario. Always confirm whether an offering can be discussed with you in your province.
Where should I start if I am completely new?
Read: Start Here → What Exactly Is a MIC? → Risk, Liquidity & Labels → Who This Is For. Then decide whether a suitability conversation is warranted.
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Informational purposes only. Diversifi Alternative Investments Ltd. is a registered Exempt Market Dealer in British Columbia, Alberta, Saskatchewan and Ontario. Target yields, distributions, liquidity and capital preservation are not guaranteed.