What is a Mortgage Investment Corp. (MIC)?
A Mortgage Investment Corp. (MIC) is a specific type of corporation that provides real estate loans to builders, developers, and other real estate owners and issues shares to the MIC investors. The investors earn interest income and borrowers obtain the financing needed to complete their projects.

A MIC is a specified type of company defined under the Income Tax Act that satisfies the qualified investment rules of the Act. Essentially, the Act allows income from a MIC to “flow through” to an investor (personal or corporate) or their registered accounts (RRSP, RRIF, TFSA) without any corporate income tax being deducted. If funds are held in an RRSP, income from the shares is not taxable in the hands of investors until the funds are withdrawn by the holder allowing tax free compounding of the investment.
What does Terrapin invest in?
The Company holds a portfolio of individual mortgages. The majority of Terrapin’s loans are in first position with the remainder in second position. The Income Tax Act requires a MIC to maintain a minimum of 50% of its loans on residential property (single family or multi family). Any remaining funds can be invested in commercial mortgages (office, industrial, retail, land, and developments e.g. bare land strata projects) or held in short-term investments. We lend primarily in British Columbia and Alberta. The loans are typically variable rate interest with 6-24 month terms so the portfolio is very fluid and the mix changes from time to time as we receive payouts on mortgages and make advances on new mortgages.
How does Terrapin earn premium yields on mortgages?
Terrapin is able to charge higher rates of interest on loans than banks due to the specialized nature of the loans held in the pool. Many of the loans held are considered interim financing, and are repayable within 12 months. Borrowers may also have financing needs greater than the banks will accommodate and Terrapin can provide more flexible payment options such as interest only or interest reserves. These loan characteristics allow Terrapin to provide interim financing at rates and loan funding fees higher than traditional banks charge. When the developments are completed, they are either sold or the borrowers seek conventional financing at lower rate of interest and pay off Terrapin's loan.
How do I invest in Terrapin shares?
Investors or their advisors simply have to contact us to receive the required forms and can hold their investment personally, inside or outside their RRSP, RRIF, TFSA, or through a corporation. How you hold your TMIC investment will depend on which forms you will need and whether or not the investment can be held directly or through a bank or trust company. Please click Forms to go to our Forms Page or click here for our contact information.
Is my investment RRSP, RRIF or TFSA eligible?
Yes. Typically investors instruct their bank or trust company to purchase shares of Terrapin through their self directed Registered Accounts. To purchase shares using their Registered Accounts, investors are required to have a self directed Registered Account at a bank or trust company. The investor instructs their trust company to purchase the specified amount of shares. The trust company will exchange the payment for share certificates along with the required forms. Our mortgage administrators can help answer questions you may have and suggest names of trust companies other investors have used in the past.
Can I buy shares outside of an RRSP/TFSA?
Yes. Individual or corporate investors may purchase Terrapin shares directly. Investors who do not want to hold their investment in an RRSP/TFSA simply have to contact us to receive the required forms and can hold their investment directly or through a bank or trust company.
Is there a minimum investment?
Yes. We require a minimum $25,000 investment per shareholder for either Class “A” preferred shares (with an annual dividend) and a minimum of $250,000 for Class “B” Preferred shares (that pay a quarterly dividend – please click here for more information). Once the minimum has been purchased, additional shares may be purchased by completing the required subscription forms for each subsequent purchase.
Can I buy shares at any time?
Yes. Terrapin issues preferred shares throughout its fiscal year based on the expected earnings for the year. Please refer to Buying Shares at Terrapin MIC for more information.
Can I sell shares at any time?
No. The shares for which you will subscribe are redeemable preference shares, which can be redeemed at the option of the directors of the company. Redemption may require up to six months' notice as the mortgage company may not be in a completely liquid position and it could take that long for the necessary cash for redemption to be available. Shares are redeemed at their par value of $1.00 per share. The reason for this is explained above under the dividend policy. Therefore it is often prudent for investors to wait until after the February 28 year end before redeeming any shares.
How do I receive my income from preferred shares?
The accumulated earnings as at February 28 will be distributed to the shareholders based on their shareholdings at February 28 within 90 days of year end for Class "A" shareholders. The Class B Preferred shareholders will be paid partial dividends quarterly and the balance discounted by 30 basis points (0.30%) within 90 days of year end (click here to refer to our Dividend Policy). The final distribution is discounted to cover the additional costs of administration and tying up capital. The income is treated as interest in the hands of the investors. Investors decide whether they want to receive their income by cheque or in additional shares of Terrapin to facilitate long-term growth and compounding. The vast majority of Terrapin’s shareholders historically have chosen to roll their investment over to benefit from the compounding of their annual return. A T5 slip is issued for non-registered accounts annually for investors income tax reporting.
Can I trade or transfer my shares?
No. Because Terrapin is a private company there is no active market for the shares. Shares can only be transferred in limited cases including between a shareholder’s accounts e.g. to/from RRSP, RRIF, TFSA, joint-spouse, personal holding company, trust or estate.
Are rates guaranteed?
No. Investing in a MIC is not like purchasing a GIC or Bond. The return to the investor depends on the results of the performance of the company as a whole. Please refer here for Terrapin’s historic return chart .
Is my principle guaranteed?
No. Your investment is secured by mortgages on the underlying real estate financed by Terrapin. But there is risk associated with any type of investment including investing in a MIC. It is management’s job to minimize that risk while balancing expected returns, but risk cannot be completely eliminated.
Can anyone invest?
No. TMIC does not lend to shareholders so none of our borrowers are eligible to invest. We require a minimum $25,000 investment per shareholder for Class “A” preferred shares and a minimum $250,000 for Class "B" preferred shares. This may exceed the amounts an investor should put in any one investment depending on the size of their investment portfolio and risk profile. Each investor should ensure they have a well diversified portfolio to balance risk as markets fluctuate over time. Investors should obtain independent investment and/or tax advice to determine if investing in a MIC is right for them given their investment criteria.
Why are Terrapin dividends treated as interest on my T5 slip?
Because Terrapin qualifies as a MIC and there is no corporate income tax deducted under the Income Tax Act, there is also no dividend tax credit and so the Canada Revenue Agency has directed that income be treated as interest.
How are the mortgages assessed?
New mortgages are approved by the Mortgage Approval Committee and go through vigorous diligence before funding that will typically include the use of third party real estate appraisers, cost consultants, environmental consultants, and lawyers before being advanced. Additionally the portfolio on a whole must meet our balanced investment criteria including maintaining a minimum of 50% of loans on residential property (single family or multifamily). The remaining funds are invested in a mix of residential mortgages, commercial mortgages (office, industrial, retail, land, and developments e.g. bare land strata projects) or short-term investments.

Terrapin’s mortgages have the same legal security in a mortgage as banks and other institutional lenders do. All documentation, security registration and disbursement of funds are prepared and handled by a lawyer licensed in the jurisdiction and are registered on title to the property being financed.