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Boosting your income with contributory mortgage schemes

When looking for better options to earn a decent income from your investments, you couldn’t be faulted for looking away from traditional banks and considering other alternatives, such as mortgage funds. But for the uninitiated, caution is advised as not all funds are created equal. Introducing a contributory mortgage income fund that is an Australian registered managed investment scheme that has stood the test of time.

Finding an improvement on bank’s dismal returns

Let’s face it: interest income from traditional banks is dismal, and the last 18 to 24 months have seen more volatility than we’ve had to face in quite some time. Because of this, many investors have been locked in investment funds, making it nearly impossible to withdraw their money.

Where, then, is it safe to invest?

We recommend looking at fixed-income contributory mortgage schemes as an excellent alternative to the low-interest Term Deposits and savings accounts on offer at most banks.

Why choose a fixed-income contributory mortgage scheme?

A contributory scheme is a non-pooled investment scheme in which the investor chooses a sub-scheme of a fund rather than having their investment pooled across all the fund’s sub-schemes. This ensures that individual Member returns cannot be impacted by other sub-schemes within the fund.

By choosing a fixed-income contributory mortgage scheme, investors can confidently look forward to knowing how much income they will regularly earn each month.

Because they are choosing a contributory (non-pooled) scheme, investors:

  • can choose where they want to invest their funds.
  • know where their money is invested.
  • are not subject to the same liquidity issues and risks as pooled funds.

Returns for fixed-income contributory schemes generally offer higher returns than traditional Term Deposits and bank savings whilst being secured by 1st mortgages. Returns can range from 4 – 10% depending on the fund, selected sub-scheme and risk level.

As with all investments, it is important to remember that higher returns usually mean higher risk. Make sure you know the loan-to-valuation ratio (LVR), and if it’s above 75%, make sure you know why and understand the high-risk level before investing.

Introducing the Australian Securities Income Fund

We encourage investors looking for a high-interest, short to medium-term investment option that has stood the test of time to consider the Australian Securities Income Fund. Compared to many other funds, the Income Fund comes out a cut above the rest, meeting the key benchmarks investors should include in their analysis of funds.

What Australian Securities does differently:

  1. We have in-depth experience in Funds Management with expertise in finance and investment in mortgage securities and property. With the origins of our business dating back to 1925 and across four generations of investors, Australian Securities is recognised as one of the country’s most established and reliable private financial service providers.
  2. Loans, and therefore investments, are 1st mortgages only, and loan-to-value ratios are capped at two-thirds of the property value. In other words, our maximum conservative Loan to Valuation Ratio (LVR) of 66% for all securities provides the investor with a healthy risk buffer in the event of a downturn in the property market.
  3. Our loan performance speaks for itself, with zero loans in arrears as of 30 September 2023.
  4. The Fund is audited bi-annually by independent external auditors.
  5. Australian Securities does not pay commissions or kickbacks. At the borrower’s request, Australian Securities may facilitate payment of introducer fees from settlement funds or periodic payments. However, due to the low management fees, Australian Securities does not pay commissions to introducers.
  6. We provide members an ‘assurance fund’ to ensure they still get paid interest if a borrower is late in payment.
  7. Australian Securities has the requisite net tangible assets to be a Responsible Entity and Self-Custodian and is permitted to hold certificates of title on behalf of sub-schemes. We do not use a third-party service.
  8. Australian Securities holds PI Cover of $5M.
  9. Some of our borrowers retire and invest their savings in the Australian Securities Income Fund

Remember to diversify

Advisors recommend that mortgage funds comprise only a small portion of your investment portfolio. You can speak to our team to review options for diversification

Have a question? Ready to invest?

Call us on 1300 275 275 to talk to one of our Investment Managers or Investment Executives. We prioritise direct communication and personalised support for our clients.

Remember to read the product disclosure statement and seek clarification from our team if any of your questions still need to be answered.

Apply today

Whether it’s growing wealth or obtaining finance to grow and invest, we can help. Kick-start the process by applying online today.