Why Invest in a Mortgage Fund?
Regular and reliable income is an important part of all investors’ portfolios. In particular, it can be useful for investors at particular life stages. The certainty of knowing your expected rate of return at the commencement of your investment can make the Australia Pacific Direct Fund a very attractive investment proposition for investors.
Other features that make mortgage funds attractive to investors:
- Reliable monthly income;
- All funds invested in first registered mortgages or cash;
Average LVR 60%; and
- 100% fixed rate loans, your expected return is known at the time of your investment.
Mortgages vs. Term Deposits
|Features||Mortgage investment||Term Deposit|
|Income source||Fixed rate of interest paid by borrower on mortgage||Fixed rate of interest paid by the issuer, usually a bank|
|Regular Income||YES - Income paid monthly to the investor||NO - Interest is only paid on maturity|
|Stable capital value||YES||YES|
|Security||Backed by underlying asset i.e. property and any further security as required||Individual bank issuer balance sheet|
|Credit risk||Carefully assessed and backed by registered first mortgage and further security if applicable||Sovereign risk and event risk|
|Return (yield)||Higher than cash investments||Lower than mortgage funds|