Monday Market Minute | Jul 07, 2025

MIC sector posts strongest H1 in a decade — renewal wave fuels growth

What Moved

Mortgage Investment Corporations across Canada reported H1 results that exceeded expectations. Average annualized returns of 8.5-10.5% were supported by record origination volumes driven by the mortgage renewal wall. Credit quality remained sound — delinquency rates held below 1.5% despite the macro uncertainty, reflecting conservative underwriting at lower LTV ratios. Several established MICs raised additional capital through exempt-market offerings, and at least three new MICs launched, targeting the growing pool of bank-displaced borrowers.

Why It Matters

The MIC sector's H1 performance underscored the structural opportunity created by regulatory divergence between bank and non-bank lending. Borrowers with strong income profiles but who failed the OSFI stress test represented a low-risk, high-yield lending opportunity that MICs were uniquely positioned to capture. For accredited investors, MICs offered monthly distributions, capital preservation, and exposure to Canadian residential real estate without the concentration risk of direct property ownership. The sector's transparency — regulated under securities law with audited financials — provided governance comfort.

Signal to Watch

Whether the BoC continued cutting into H2, which would gradually reduce the stress-test gap and slow the flow of bank-displaced borrowers — the very pipeline fueling MIC growth.

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