For many investors, finding an opportunity that delivers high returns is an integral part of their long-term investment goals. And it’s important they have the security of knowing that their investments are in a traditionally stable asset class. One method to achieving high-return investments while maintaining this level of security in your portfolio is via first mortgage investment opportunities.
What is a first mortgage investment?
A first mortgage investment is a type of secured investment where funds are lent to borrowers and secured by a first-ranking mortgage over real estate. The loan and investment are both managed by a mortgage fund. The loan can be used for a range of residential or commercial purposes such as bridging finance, refinancing, land subdivision, a set of townhouses or even a hospital.
First mortgage investments generate monthly income for investors via monthly distribution payments made to the Fund by the borrower when paying off their private loan. The process of earning passive income from your investment is similar to how you can earn dividends from dividend stocks.
At CCG, our investors currently earn from 9 - 11% p.a. monthly income.
A First Mortgage Investment is recognised as one of the more conservative yet high-value investment opportunities available to Investors due to the fact that they are secured by an asset tied to the Australian real estate market which, historically, has continued to show resilience and strong growth.
As experts in the industry, we’ve put together our top tips for first mortgage investing to achieve your investment goals:
1. Align Investments With Your Financial Goals
Understanding your risk profile is a critical step when considering investment opportunities, including first mortgage investments. Your risk profile reflects your financial goals, investment horizon and tolerance for a conservative vs volatile asset.
Investors with a conservative risk appetite may prefer secured options like first mortgage investments as they are backed by tangible assets and offer predictable returns. Assessing your risk profile helps ensure your investments align with your financial objectives and comfort level enabling you to make informed decisions that suit unique circumstances.
With a first mortgage investment, you can choose from a wide range of investment terms, locations, loan-to-value ratios (LVRs) and, of course, different investor target returns giving you the power to select the opportunities that best meet your investment goals.
Are These High-Risk Investments?
Although every investment opportunity comes with an element of risk, first mortgage investments are known as a conservative, secured, stable asset with an added layer of protection due to the fact they are backed by Australian property and the security of a registered first mortgage.
At CCG, we take a careful and thorough approach to approving borrowers for our mortgage investment fund utilising insights developed over 25+ years of successful private lending. Each loan made available for investment has been subject to a rigorous assessment in accordance with our documented lending policies and has been approved by our credit committee. All properties used to secure a loan are valued by our independent, qualified panel of property valuers.
CCG manage the entire loan process from settling the loans to the collection of interest payments and we distribute the available returns to Investors on a monthly basis. This careful approach as well as our longstanding relationships with our industry partners has helped us to become one of the leading providers of high-return investments via our first mortgage fund in Australia. If you're looking for consistently stable, secured high returns, CCG is a great option for your investment needs.
2. Understand Loan-to-Value Ratios (LVRs)
In high-return investments such as first mortgage loans, understanding the loan-to-value ratio (LVR) is essential as it directly impacts both risk and potential returns. LVR reflects the loan amount as a percentage of the property's value and while many assume lower is always better, the ideal LVR depends on your risk profile. A lower LVR provides a greater buffer, offering more security and reduced exposure, which may suit conservative investors.
Conversely, a higher LVR can deliver higher returns but may, not always, carry increased risk, making it more suitable for those with a greater risk tolerance or a custom investment portfolio. Assessing how LVR affects your investment, is critical for making informed decisions aligned with your financial goals.
3. Prioritise Due Diligence and Transparency
Thorough due diligence and transparency are crucial when selecting high-return investments such as first mortgage investments. At CCG, we uphold rigorous standards to ensure every investment aligns with our Investors' expectations for security and performance. The Fund provides loans with conservative lending ratios, typically between 65% and 70% LVR of the underlying security property value. This approach ensures a strong buffer between the loan amount and the property's value, mitigating risk while offering stable returns.
To further enhance security, all properties used to secure loans are independently valued by our qualified panel of independent property valuers, ensuring accurate and unbiased assessments. CCG manages the entire process, from settling the loan to collecting distribution payments and streamlining the investment experience for our clients. Investors benefit from our consistent distribution of available returns on a monthly basis, offering both predictability and convenience. By prioritising due diligence and maintaining transparency, CCG provides a secure and reliable platform for Investors seeking high-return opportunities.
4. Diversify Across Loan Types and Borrower Profiles
Diversification is key to maximising the potential of high-return investments like first mortgage loans. By spreading your capital across different loan types—such as bridging loans, construction loans, and residual stock loans—you can reduce risk and create a more balanced portfolio. Each loan type offers unique benefits, from the higher returns of development finance to the stability of short-term business loans, ensuring your investments are not overly reliant on any single category.
Diversifying borrower profiles further enhances the security of high-return investments. Loans to developers, SMSF trustees, business owners, and property investors cater to a variety of financial needs and risk levels, providing multiple income streams. Geographic diversification, such as lending against properties in metropolitan and growth areas, can also help minimise exposure to specific market fluctuations. At Credit Connect Group, our range of secured loan options and expertise ensures that investors can confidently build a diversified portfolio, achieving stable and consistent returns while safeguarding capital.
5. Choose Investments Backed by Strong Real Estate Markets
When selecting high-return investments, focusing on opportunities secured by properties in strong real estate markets is essential. Real estate markets with stable demand, consistent growth, and proven resilience provide a solid foundation for securing your investment. Properties in prime locations—such as metropolitan areas, growth corridors, or high-demand regional hubs—are more likely to retain or increase in value, reducing the risk of loss. High-return investments backed by real estate in these markets not only offer a reliable security buffer but also enhance the predictability of your returns.
At Credit Connect Group, all loans are secured by Australian real estate, with properties carefully selected and independently valued by qualified experts. Our approach prioritises investments tied to markets known for their stability and growth potential, ensuring that investors benefit from consistent income and reduced risk. By choosing high-return investments supported by strong real estate markets, you can achieve a balance of capital preservation and income generation while leveraging the inherent security of the Australian property market.
Focus on Property-Backed Investments for More Stability
CCG leverages property-backed lending as it provides Investors with an added layer of security and stability by being tied to tangible real estate assets. These investments offer consistent, predictable income and capital preservation, as they are secured against the value of a security property that backs the borrower’s loan. Historically, the Australian real estate market has shown resilience, making property-backed investments an attractive option for those seeking stability while generating steady returns. By prioritising opportunities backed by real estate, investors can balance risk and reward more effectively.
Our investors benefit from not only the high-return investments steady income stream via monthly distribution payments but also the security that capital appreciation affords in terms of peace of mind. This strategic approach not only enhances the security of the investment but also capitalises on the Australian real estate market's growth, providing a balanced blend of security and high returns.
Maximising Income With Property-Backed Investments
First mortgage investments not only provide high returns but also offer peace of mind through their security and stability. By following these five tips, you can create a diversified, income-focused portfolio that generates consistent, predictable earnings while preserving your up-front capital.
If you’re ready to explore high-return investment opportunities secured by Australian real estate, contact us today at 1300 795 507 or email us at [email protected].