How can we pay returns from 7% to investors? | Funding


We had a question recently from Jeff, an investor, about investing in our secured property loans. 

Jeff’s question: How can we expect to pay 7% to investors when the going rate for mortgages is around 4%?

This question actually applies generally to all mortgage funds or property debt funds in our sector.

This space has billions of investor funds poured into it due to it increasing in popularity as a great alternate investment to stocks and direct property investments.

It’s a great question and it comes up often so we thought we would answer it in a post.

The simple answer: Our mortgages are not comparable to mainstream 30 year major bank home loans.

Three main reasons mortgage investment funds, including ours, can pay targeted returns from 7%:

  1. We’re a specialist mortgage lender with products suited to borrowers with short term finance requirements. They are only taking the loan for an average of 6-12 months.
  2. Our borrowers are usually more time sensitive than cost sensitive as they usually need the loans to settle within 1-2 weeks. A bank struggles to complete a mortgage application in such a timeframe. We find a lot of borrowers coming to us because they have been told their bank will not be ready and their settlement is quickly approaching.
  3. Our products are far more flexible than mainstream mortgages and our borrowers are prepared to pay a little more for increased convenience and flexibility. A lot of our borrowers are astute property investors who don’t want the hassle of going to a bank.

Thats how we can pay targeted returns to investors starting at 7%*. For example on a typical scenario if we were to pay investors 7% we would then on lend the funds to the borrower at 8 – 8.5%. We make money off the difference or what’s know as the margin.

Here’s a recent example:

We helped a professional couple in Melbourne under following circumstances:

  1. They had paid 10% deposit on a block of land in a newly developed growth area Ainsworth Victoria.
  2. The deadline to settle was 1 week away and if they failed to settle they would lose their deposit.
  3. The land had actually increased from when they signed the purchase contact to when settlement was by about $30,000. If they failed to settle they would lose this increase in equity.
  4. They planned to settle and sell the block with 6 months and turned to
  5. We were able to provide a loan with 7 days.
  6. The investors in the loan received a targeted return of 7.95% return on a 6 month loan term.
  7. The borrower’s exit strategy or repayment plan was to sell the property and repay the loan.

As you can see from the above example a 30 year bank home loans didn’t suit the borrowers needs.

We can help you start building a regular monthly income stream and make your savings work harder. Create your online investment account today!

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Invest in stand-alone first mortgages. - Online

Join other investors, companies and self managed super funds (SMSF) enjoying frequent interest payments direct to their account. Investments are backed by first registered mortgages over Australian real estate. Build a regular monthly income stream and make your savings work harder.

Each investment is in a single stand-alone mortgage and the investor can diversify their portfolio by selecting and investing in multiple investments on offer.

  • Registered first mortgage.
  • Interest paid monthly.
  • Short to medium investment terms.
investment platform

Online Platform

Access our investments through our online platform.
  • Invest from $5,000.
  • Fund loans with other investors.
  • Monthly interest payments.
  • First mortgage security.

Whole Investments

Select and fund whole loans via our investment team.
  • $250,000 minimum.
  • Subject to loans being available.
  • Monthly interest payments.
  • First mortgage security.

Request an Info Pack

Interested in investing with us? Request an information pack to receive  comprehensive information on how  to make whole investments through our online platform or via our investment team.

Opening an Account is Easy

1. Register : Create a free account by signing up online here

2. Fund your account : Top up funds to your account. These funds will be held in trust until you select an investment to invest in. 

3. Invest : Select and invest in investments online and via email. 

Investment Platform


During the loan application process and the borrower agree on a suitable interest rate based on the LVR, property location and other factors.

Our Loans are backed by a registered first mortgage loan against Australian real estate. A first mortgage is a first charge over real estate owned by the borrower. If there is a Default in repayment of the Loan, the property can be sold in order to recover the Loan and repay Members.

The security property varies from loan to loan however each loan is secured over either Residential or Commercial real estate in locations across Australia.

Borrowers must have Australian real estate security, the ability to meet their repayments and a repayment strategy to exit the Loan at the end of the term. Our mortgages are catered to borrowers that need a fast and flexible solution. Short-term mortgages are more expensive than traditional finance, which is why we are able to provide higher returns to our investors.

Once an investor has signed up and is approved, they can select, invest and manage their investments via our platform and professional management staff. An investor can choose to fully fund a Loan or invest alongside other Members in a particular Loan.

The Funding Investment Trust is the legal structure behind the platform. The Funding Investment Trust (“the Trust”) is an ASIC registered (ARSN 616 185 276) managed investment scheme where members of the Trust are provided with access to first mortgage investments.
Manager: ACN603756547, ARNo. 1239776 Trustee:MelbourneSecuritiesCorporationLtd ACN160326545,AFSL428289
Custodian: Sandhurst Trustees Limited ACN 004 030 737

You can download the Product Disclosure Statement (PDS) by clicking here.

The loan to value ratio or LVR is the maximum lend secured over the property. The LVR is specific to the individual mortgage selected by the investor however the LVR must be less than 70% of the value of the security property.