Canadian investors looking for real-estate-backed income usually land on two paths: buying shares in a Mortgage Investment Corporation (MIC), or lending directly as a private mortgagee. They both sit outside the stock market and both can use registered funds in the right structures — but they are not the same product.
This guide compares them so you can match capital to the right structure. For the hands-on lending path, start with how to invest in private mortgages in Canada. For pooled vehicles, see our Mortgage Investment Corporations guide.
Quick comparison
| Direct private mortgage | MIC (pooled) | |
|---|---|---|
| What you own | A mortgage registered in your name (or your RRSP/TFSA trustee) | Shares in a corporation that holds many mortgages |
| Control | You approve each deal | Manager selects loans |
| Diversification | One property per cheque (unless you fund many deals) | Spread across a portfolio |
| Liquidity | Locked for the mortgage term | Varies — redemption windows or lockups |
| Administration | Lawyer + trustee (if registered) | Manager handles servicing |
| Securities rules | Direct mortgage lending is generally not a security distribution by LendCity™; structure still matters | MIC shares are securities — sold via registered dealers / exemptions |
| Typical fit | Investors who want deal visibility and title security | Investors who want passive, diversified mortgage exposure |
LendCity™ is a mortgage brokerage. We connect capital providers with private mortgage and development opportunities. We do not sell MIC shares or act as an exempt market dealer.
What a MIC actually is
A Mortgage Investment Corporation pools investor money, lends it as mortgages on Canadian real estate, and distributes interest income to shareholders. MICs are a tax structure under the Income Tax Act with rules around assets, shareholder concentration, and income distribution.
You are buying a security. Suitability, offering documents, and dealer registration matter. Yields you see advertised elsewhere are not guarantees — and past performance is not a promise of future results.
What direct private mortgage investing is
In direct lending, you (or your self-directed RRSP/TFSA) become the lender on a specific property. Capital moves through a lawyer’s trust. A mortgage is registered on title. Interest is paid per the commitment. At maturity, principal is repaid or rolled into a new deal.
You see the property, LTV cushion, borrower profile, and exit plan before you fund. That visibility is the main reason capital providers choose this path. Our RRSP private mortgage investing guide covers registered-account steps.
Control vs diversification
Choose a MIC when you want someone else to underwrite and service a book of loans, and you accept that you will not pick each property.
Choose direct lending when you want to approve the collateral, LTV, and term yourself — and you are willing to review one deal at a time.
Neither path eliminates risk. Direct lending concentrates risk on fewer properties; MICs dilute that risk but introduce manager, liquidity, and portfolio-quality risk.
RRSP and TFSA considerations
Both paths can work with registered funds when structured correctly:
- Direct mortgages — self-directed RRSP/TFSA with a trustee that administers mortgage investments; mortgage registered for the plan.
- MIC shares — often qualified investments for RRSPs/TFSAs when purchased through the proper channel; confirm with the dealer and trustee.
If tax-sheltered interest on a specific mortgage is the goal, direct lending through a self-directed plan is the clearer fit for many investors we speak with.
Risk checklist (either path)
- Understand how you get paid and when capital returns
- Review LTV policy and what happens on default
- Confirm who holds legal title / security
- Read liquidity / redemption terms before you need cash
- Separate marketing yield claims from underwriting quality
- Get independent legal or financial advice where appropriate
Which should you choose?
- Hands-off, diversified mortgage exposure → evaluate MICs through a registered dealer (not through LendCity™).
- Deal-by-deal secured lending with title in your name → private mortgage investing with LendCity™.
- Larger capital, longer timeline, equity upside → development partnerships.
Still unsure? The Invest in Real Estate hub compares private lending and development equity side by side.
Next steps
If you have capital to deploy and want secured Canadian mortgage opportunities — or want to be notified when deals open — join the capital pipeline on our private lending page or book a strategy call with Scott.
For deeper reading: how to invest in private mortgages, RRSP private mortgage steps, and the MIC overview.
Free checklist
RRSP / TFSA private mortgage checklist
Trustee setup, arm’s-length rules, lawyer’s trust, and the diligence questions to ask before you lend registered funds.
Disclaimer: LendCity™ Mortgages is a licensed mortgage brokerage. Content on this page is for educational purposes only and does not constitute legal, tax, investment, securities, or financial-planning advice. Rates, premiums, program terms, and regulations referenced are as of the page's last updated date and are subject to change. Any investment returns, rental yields, tax savings, or case-study figures shown are illustrative only — they are not guaranteed, not typical, and individual results will vary. Consult a licensed lawyer, Chartered Professional Accountant, or registered dealer before acting on any information above. Editorial standards.