Mortgage-Backed Investments VS Term Deposits

They’re simple, safe, and backed by banks, an easy way to park capital and earn a modest return.

But in today’s environment, where inflation erodes savings faster than traditional deposits can grow them, the question becomes: Is “safe” still safe enough?

Forward-looking investors are increasingly seeking alternatives that combine security with stronger, more sustainable income. That’s where Millbrook’s mortgage-backed investments come into play.

Why Term Deposits No Longer Keep Pace

A term deposit (TD) locks your cash with a bank at a fixed rate for a set period. For many, this feels reassuring, low risk, government-guaranteed (up to $250,000), and predictable.

But the trade-offs are clear:

• Returns are modest—often below inflation.
• Income is infrequent—typically only paid at maturity or annually.
• Flexibility is limited—early withdrawals usually come with penalties.

For investors who need steady monthly cash flow, retirees, SMSFs, and income planners, these limitations can be significant.

Mortgage-Backed Investments: The Modern Income Alternative

Through Millbrook’s mortgage credit fund, investors earn income from loans secured by first mortgages on Australian property. Unlike term deposits, these investments are structured to deliver consistent monthly income at significantly higher rates, historically 6–8% p.a.

Key Advantages:

• Higher yield potential – helping offset inflation.
• Monthly cash flow – ideal for income-focused planning.
• Capital security – loans are backed by property with conservative loan-to-value ratios.
• Choice and flexibility – select your own loans or diversify across a managed pool.

While not government-guaranteed, risks are mitigated through disciplined lending practices and conservative credit policies.

Side-by-Side Comparison

So, Which is Better for Income?

If your primary concern is absolute capital protection with minimal return, a term deposit still has its place.

But if you’re seeking:

• Stronger, regular monthly income
• Security underpinned by property
• Diversification beyond traditional banks
• Income resilience against inflation

…then Millbrook’s mortgage-backed investments represent a more forward-thinking solution.

Who Should Be Considering This?

• Retirees seeking dependable monthly income
• SMSF trustees diversifying beyond cash
• Pre-retirees planning sustainable cash flow
• Anyone looking for more than 4% on idle funds

Final Thought

The investment landscape has shifted. Relying on term deposits alone risks leaving investors behind, earning less while costs rise.

Mortgage-backed investments, when managed conservatively, offer a modern alternative: higher income, monthly cash flow, and capital secured by real property.

It’s not just about preserving wealth anymore, it’s about growing income intelligently.

Learn more about Millbrook’s investment options here.