Beginner’s Guide to Monthly Income from Mortgage Investments

In today’s market, where term deposits deliver modest returns and share markets remain volatile, many Australian investors are searching for stable and consistent income. One increasingly popular option is mortgage-backed investments, a proven strategy that can generate regular monthly income secured by real property.

If you’re new to this asset class, this guide will help you understand how mortgage investments work, how they generate steady returns, and why more Australians are choosing this reliable alternative to traditional savings and market-linked investments.

What are mortgage investments?

Mortgage investments involve providing funds to borrowers, secured by real property assets such as residential or commercial real estate. In essence, you act as the lender  not the property owner. Instead of buying property directly, your investment is used to fund a loan, and in return, you receive regular interest payments, much like a bank would.

As an investor, you’re not buying the property. Instead, you’re providing the funds for someone else to borrow, and in return, you earn regular interest payments, just like a bank would.

At Millbrook Group, we specialise in first mortgage investments, the most secure form of mortgage lending. First mortgages take priority over all other claims on a property, offering investors an added layer of protection and peace of mind.

How do they generate monthly income?

The borrower repays their loan through monthly interest payments. These are then passed on to you, the investor, usually as a monthly distribution.

Here’s a simplified flow:

1. You invest in a mortgage-backed fund (like the Millbrook Credit Fund).
2. The fund lends this money to borrowers secured by property.
3. Borrowers pay monthly interest on their loans.
4. That interest becomes your monthly income.

The beauty? It’s passive. You don’t have to chase tenants, manage real estate, or watch the share market every day.

Why choose this type of investment?

Consistent returns

With the right fund, returns are generally predictable. Millbrook, for instance, offers options that pay monthly distributions, making it ideal for investors seeking income.

Secured by real property

These loans are secured by tangible property, adding a layer of protection. At Millbrook, we take a conservative approach to loan-to-value ratios.

Diversified options

With options like Millbrook Select (where you choose your loans) or Millbrook Diversified (where we manage everything), you can match your investment style.

Who is it suitable for?

Mortgage investments may be right for you if you:

• Want reliable monthly income
• Are nearing retirement or in retirement
• Prefer capital preservation
• Like the idea of investing in property but not owning it

What are the risks?

No investment is risk-free. With mortgage investments, key risks can include:

• Borrower may default – this could lead to monthly income distributions stopping but is mitigated by the property security and conservative lending
• Liquidity – pooled funds may have a notice period for withdrawals. Repayment of Select loans may be delayed if the borrower is unable to repay at maturity
• Property market shifts – values can change, but first mortgages are generally less exposed

At Millbrook, we aim to reduce these risks through strict lending criteria, independent valuations, and a focus on capital preservation.

Getting started with Millbrook

Ready to explore monthly income opportunities?

You can:

• Start with a minimum investment that suits your comfort level
• Choose from Select or Diversified options
• Receive monthly income straight to your nominated account

If you’d like to learn more or have questions, contact us or visit the Invest with us page to get started.

Disclaimer: The information in this article is provided by Millbrook Group for general informational purposes only. It does not constitute financial product advice, investment advice or a recommendation. Past performance is not a reliable indicator of future results. All investments carry risk, and investors may lose some or all of their capital. You should consider your own financial situation, objectives and needs, and read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making any investment decision.

Please note: Term Deposits are covered under the Australian Government’s Financial Claims Scheme (FCS), which protects deposits up to $250,000 per account holder per institution in the event of a bank failure. Mortgage-backed investments do not carry this government guarantee.