What is a Mortgage Investment Corporation (MIC) in Canada?

Many mortgage agents work with private lenders without fully understanding where the capital comes from or how the lending entity is structured. A Mortgage Investment Corporation — commonly called a MIC — is the most common structure used by private and near-private lenders in Canada. Understanding how they work helps you work with them more effectively and explain them to clients and investors.

What is a MIC?

A Mortgage Investment Corporation is a Canadian corporation structured specifically to invest in mortgages. It is governed by Section 130.1 of the Income Tax Act (ITA), which provides the MIC with a favourable tax treatment: if the MIC distributes all of its income to shareholders each year, the corporation itself pays no corporate income tax. The income flows through to shareholders as interest income or dividends, taxed in the shareholder's hands.

This pass-through structure makes MICs attractive to investors looking for regular income. An investor buys shares in the MIC, the MIC deploys that capital as mortgages, and the interest income earned on those mortgages flows back to shareholders as dividends (treated as interest income for tax purposes in most cases).

How MICs pool capital

A MIC is essentially a pooled mortgage fund. Instead of one person lending their own money on a single mortgage, dozens or hundreds of investors each contribute capital to a corporate pool. That pool is then deployed across a portfolio of mortgages. This structure offers investors diversification — their capital is spread across many loans rather than exposed to a single borrower and property.

For the MIC to qualify under ITA s.130.1, it must meet specific requirements:

• At least 50% of the corporation's assets must be in mortgages, hypothecs, or cash and deposits.
• The MIC must be a Canadian resident corporation.
• The MIC must have at least 20 shareholders, and no one shareholder can own more than 25% of the outstanding shares.
• All or substantially all of the mortgages must be secured on real property in Canada.
• The MIC must distribute all of its income each year to qualify for the pass-through tax treatment.

Typical LTV and rate ranges

MICs occupy different niches in the lending market. Some focus on near-prime residential lending at lower rates and LTVs. Others specialize in higher-LTV, credit-challenged, or short-term bridge financing at higher rates. The following ranges represent the broad MIC market:

• Conservative residential MICs: First mortgage focus, LTV up to 75%, rates 7–9%, borrowers who just miss A-lender criteria.
• Mid-range MICs: First and second mortgages, LTV up to 80% on firsts, 75% on blended, rates 9–12%, credit-challenged borrowers with good equity.
• Higher-risk / construction MICs: Construction loans, bridge loans, higher LTV exceptions, rates 12–15%+, shorter terms of 6–18 months.

MIC vs. individual private lender

Both MICs and individual private lenders can fund mortgages outside institutional channels, but there are important differences for agents to understand.

An individual private lender is a single person (or company) deploying their own capital. Decisions are made quickly and informally — often a one-page summary and a conversation is enough. But individual lenders have their own quirks, limited capital, and may have geographic or property-type preferences that are not documented anywhere. The relationship is personal, and losing the lender's confidence means losing access to capital entirely.

A MIC operates more like an institution. It has underwriting guidelines, application forms, turnaround commitments, and sometimes BDS (Broker Deal Status) programs. MICs typically have a dedicated broker relations team, published rate cards, and consistent decision-making criteria. For agents who want a reliable and scalable private lending channel, established MICs are generally preferable to relying on individual investors.

How agents work with MICs

For most agents, working with a MIC is similar to working with any other lender: you submit the file, the MIC underwrites it, issues a commitment, and funds through a lawyer. The key differences are in the documentation requirements and the fee structure.

MICs vary in how they pay agents. Some pay a BPS finder's fee directly to the brokerage and allow agents to charge a separate borrower fee (subject to disclosure). Others pay no finder's fee and expect the agent's compensation to come entirely from the borrower fee. Know the compensation structure before you submit and ensure every fee is disclosed to the borrower in writing.

From a disclosure standpoint, FSRA in Ontario and the equivalent regulators in other provinces require full cost of borrowing disclosure on all private and alternative mortgages. The disclosure must show the mortgage amount, interest rate, all fees, and the effective annual rate. No fee is exempt from disclosure.