Why More Canadians Are Moving from GICs to Short-Term Mortgage Investments in 2025

 

Short-Term Mortgage Investments in 2025

With GICs Underwhelming, Short-Term MICs Are Delivering Results in 2025

In mid-2025, Canadians looking for dependable, short-term income are waking up to a financial shift: Guaranteed Investment Certificates (GICs) aren’t keeping up. As the Bank of Canada maintains its 2.75% policy rate, most GICs are hovering below 4%—not enough to beat inflation or satisfy return-hungry investors.

Enter short-term Mortgage Investment Corporations (MICs)—a powerful, real estate–backed alternative that’s now commanding investor attention across British Columbia, Alberta, and beyond.

GICs: Safe, But Sluggish

GICs have traditionally been the go-to option for capital preservation. They’re low risk, federally insured, and predictable. But in 2025, they come with downsides:

  • Average 1-year GIC rates are between 3.5%–3.9%
  • Funds are locked in unless you pay penalties
  • All income is fully taxable

In today’s cost-of-living environment, that simply isn’t good enough for many Canadians. Investors are now actively seeking alternatives that offer security without stagnation.

MICs: Real Estate–Backed Returns Without Ownership Hassles

Short-term MICs offer a way to earn consistent income from Canada’s real estate sector—without becoming a landlord or tying up capital for years.

What is a MIC?
A Mortgage Investment Corporation is a pooled fund that lends to borrowers—often short-term, secured loans—and pays investors monthly or quarterly from the interest earned.

Unlike GICs, MICs typically target returns in the 7–9% range, and many allow redemptions multiple times a year.

To understand the basics, read How Does a MIC Work?

Why Are Canadians Switching in 2025?

1. Higher Income Potential
MICs like Versa Platinum’s fund are targeting 7.95%–13.95% annual returns—far outpacing fixed GICs, even when inflation-adjusted.

2. Lower Commitment Periods
Short-term MICs operate on 6–18 month lending terms, often with faster capital turnover. This means your funds are more liquid than you might expect.

3. Real Estate Security
All investments are backed by real property, typically at conservative loan-to-value ratios. It’s income with a cushion of collateral.

4. TFSA & RRSP Eligibility
Unlike most alternative investments, MICs can be held within registered accounts, making your income tax-free or tax-deferred.

Get the full list of benefits here: Benefits of MIC Investments

Short-Term, Long-Lasting Value

With flexible redemption structures and professional underwriting, short-term MICs provide an attractive risk-reward profile.

They’re particularly suited to:

  • Retirees seeking income
  • Professionals building TFSA/RRSP portfolios
  • Business owners using idle cash
  • Young investors starting with $10,000 or more

And with real estate in BC regions like Abbotsford, Nanaimo, and Surrey holding steady, investors benefit from geographic exposure to strong, asset-backed demand.

Explore how MICs compare to direct private lending in MIC vs Private Lending

Final Thought: It’s Time to Rethink the “Safe Bet”

GICs still serve a role—for extremely conservative investors or those unwilling to assume any market risk.

But for Canadians looking to:

✅ Preserve capital
✅ Beat inflation
✅ Earn better short-term returns
✅ Access real estate passively

…short-term MICs offer a compelling and timely upgrade.

Start exploring opportunities from just $10,000 with Versa Platinum MIC and discover how your money can work smarter—even in uncertain times.

 

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