FAQs

Millbrook raises money direct from investors and provides loans to property developers and other property-based borrowers through the Millbrook Mortgage Find and the Millbrook Income Fund.

Specific (contributory) Option Mortgage Investments FAQ

This is the most common question we get asked and while our formal disclosure documents and other information on this page set out the investment process in detail, the following is a simplified explanation.

  • You complete an application to become a Fund member and discuss your investment preferences with one of our staff. There is no cost to join or invest.
  • We will present you with some potential investments to choose from. This information includes a summary of the security property, its current value and proposed loan amount.
  • You select an investment and remit your money to us which is held in the Fund’s Investor Trust Deposit account with an Australian trading bank until applied to the selected investment.
  • We confirm your investment by way of a Mortgage Certificate
  • Each month we will pay you the agreed rate of fixed interest, subject to the borrower meeting their repayments under the mortgage you have invested in. If the borrower defaults on payment we will advise you accordingly and keep you regularly informed regarding the recovery process. At our discretion we may continue to pay you your interest payment as if there was no default (but we still advise you of the default). When the arrears of repayment are recovered from the borrower, if we have maintained you interest payment we retain any late payment fees the borrower may have paid. If we have not maintained your interest payments while the mortgage was in default, you receive 80% of any late payment fees.
  • You cannot withdraw your investment until the borrower repays the mortgage (usually at maturity).
  • When a mortgage is repaid your money returns to the Fund’s Investor Trust Deposit A/C (ITD) which can then be redeemed or invested in another mortgage. Investors with funds in the ITD A/C receive priority for placement into new mortgage investments.
  • If the borrower wishes to roll over their loan for a further term and we agree, you will be advised of the new terms and have the opportunity to either redeem or continue your investment.
  • You receive an annual statement of interest received for tax purposes.
  • You can request a statement of your account from us at any time.

The ITD is a separate sub-scheme of the Fund where the only asset is cash invested in the Fund’s name in an Australian Trading Bank. Members who elect to use the Investor Trust Deposit (ITD) Account receive a range of benefits:

  • Funds invested in the ITD awaiting placement into a mortgage investment currently earn a daily rate of 3.5% pa. The Fund Manager subsidises the interest paid by the bank to achieve this attractive premium. Investors in the ITD receive their interest monthly along with that applicable to any other investments they have with the Fund.
  • Monies being returned from repayment of a mortgage, rather than being remitted back to our investor will automatically be placed in the ITD and therefore continue to earn interest. Should an investor instruct us to return funds to them we would of course do so.
  • Monies held in the ITD receive priority for placement into new mortgages that become available for investment.
  • Investors who may be temporarily unavailable to remit monies (such as travelling overseas) avoid the need to provide written approval to invest – remembering they still have the right to opt out of the investment within 10 days if they so choose.
  • There are sometimes unexpected short delays in settling new mortgage loans and participants in the ITD facility will receive interest at the ITD rate from the day of receipt by us until those funds can be placed on the selected mortgage investment. Members not participating in the ITD receive no interest for the period between receipt and placement into their selected investment.

If a Loan goes into default, we increase our level of management of the Loan and Mortgage and take steps to have the Borrower rectify the default.  If the default is ongoing, we report regularly to Members of the Sub Scheme about its status. If the default is not rectified, we take steps as mortgagee to realise the Sub Scheme property and any other collateral security.

If the Borrower defaults, we charge the Borrower for management fees and expenses incurred in rectifying the default and recovering secured moneys.  Our fees and expenses will only be deducted from Members’ investment funds if there is a shortfall upon realisation of the Sub Scheme Property and any other collateral security. The balance of Member’s investment funds will be paid to Members. If a management fee is to be deducted for a particular Sub Scheme, this will be disclosed to you.

During the period of default we may elect to continue to pay you your usual monthly interest at the standard interest rate. In these circumstances we will retain the difference between the amount paid to you and the higher penalty rate when the default is recovered from the Borrower. If we do not elect to pay you the usual monthly interest at the standard interest rate, you will receive 80% of the difference between the standard interest rate and the higher penalty rate upon recovery of the default from the Borrower. The 20% retention by us recognises the additional burden on our resources in collecting the defaulting loan.

No investment is totally secure however we endeavour to structure our mortgage loans so they provide an appropriate mix of return and security. We recognise different investors have different risk appetites and accordingly our mortgages have a range of risk profiles.

Return of capital and payment of interest on funds invested in our Funds is not guaranteed by us. You should carefully read the section of the Information Memorandum or Product Disclosure Statementconcerning the risks of investing and make your own assessment whether the investment is right for you before approving the allocation of your funds to a particular Sub Scheme. If an you have any concerns regarding a potential investment we encourage you to seek input from an independent financial adviser.

In some circumstances, a Loan may be extended by the Fund Manager. The existing investors will be asked if they wish to renew their investment for the further term but for all practical purposes the extension is considered as a new loan and investors have the right to redeem their investment is they so desire.

Repayment of a loan by a Borrower before the end of the Loan period occurs from time to time, e.g., upon sale of the Sub Scheme Property by the Borrower. Early repayment will be subject to the terms and conditions of the Loan and may attract an early repayment charge that will be retained by the Fund Manager.

When a Sub Scheme loan is repaid, depending on your instructions, your funds are either returned to you or held in our Investor Trust Deposit Account. We will send you information about alternate Sub Scheme investments or you may elect to withdraw your funds.

Loans are repayable at the end of the Loan period but are not always repaid on that date.  Repayment of your investment funds will be available when the loan repayment is made.

We have the discretion to enforce the higher rate of interest in the case of late repayment but we do not always do so. If the Loan is not repaid on time, you will be advised of an estimated time frame for repayment and interest will continue to accrue until the Loan is repaid.

No, there is no entitlement to withdraw from a Sub Scheme investment until the Borrower repays the mortgage loan. An application for early withdrawal before the end of the Loan Period due to unforeseen exceptional circumstances or hardship will be considered, providing a substitute investor can be placed into the investment.

No. New investment funds are not placed in a Sub Scheme that is in default, subject to one exception. Some investors may specifically authorise investment in a Sub Scheme that is in default, in order to take advantage of the default interest rate (typically 6% or more above the standard rate) and accept the risk associated with the default.

The term of your investment commences on the day we allocate your investment funds to a Sub Scheme. There may sometimes be a short delay between the receipt of your funds and settlement of the mortgage loan (in the case of a new loan) during this time you will not earn interest. However, if you have elected to use our Investor Trust Deposit (ITD) Sub Scheme your money will earn interest at the rate applicable to the ITD form the day of receipt until placement into your selected investment.

The interest rate for each loan is specified in the investment information provided to intending investors. The interest rate offered for investments in Sub Schemes varies from Sub Scheme to Sub Scheme. We do not offer a standard interest rate across all Loans. Generally, interest rates are fixed for the Loan Period.

There are two types of mortgage funds – contributory and pooled. A contributory fund gives investors the freedom to invest in their choice of any of the fund’s available mortgage loans (called “Sub Schemes”). By contrast, in a pooled fund, investors invest in a ‘pool’ of mortgages, being all the mortgages in the fund. They cannot choose if they do not wish to participate in a particular loan within the pool.

Our Funds are contributory mortgage schemes offering investments secured by registered mortgages over real estte. Each loan is known as a Sub Scheme and is separate from other Sub Schemes in the Fund.

You can select one or more Sub Schemes for your investment funds. Your entitlement to income and capital is based only on your investment in a specific Sub Scheme. You do not have any right to the income or capital of any other Sub Scheme of the Fund. 

Pooled Option Mortgage Investments FAQ

As the name suggests it is an investment in a pool comprising of a number of mortgages, each with varying term, return and risk. Any loss on realisation of a mortgage in the pool is shared by all Pooled Option investors in proportion to their investment in the Option.

The current interest rate applicable to investments in our Pooled Option sub-scheme can be found on this website and is made known to you when you first invest. That initial rate is fixed for 12 months from the date of investment, after which it will revert to the current rate applicable to the Pooled Option. The rate paid on the Pooled Option is determined by us from time to time and any reduction in return will be advised to all Members invested in the Pooled Option and will not take effect for a period of 90 days following that advice.

Your Pooled Option Mortgage Investment commences earning interest from the date it is received by us.

You can withdraw your investment subject to 90 days written notice to us and the Pooled Option sub-scheme having sufficient liquidity. If there is insufficient liquidity, we will endeavour to manage the sub-scheme’s cash flow to ensure as far as possible that liquidity is sufficient to meet redemption requests. As liquidity becomes available, outstanding redemption requests will be met in the order in which they are received.

If a Loan goes into default, we increase our level of management of the Loan and Mortgage and take steps to have the Borrower rectify the default.  If the default results in a loss or is considered by us as being likely to realise a potential loss on realisation, that loss or potential loss of capital is shared by all investors in the Pooled Option sub-scheme. We also report quarterly on this website in respect of the level of loans in default by more than 30 days. For more information regarding the impact of a loss on your investment please refer to the PDS (Section 4: How do I invest in the Fund – To Invest in a Pooled Option Mortgage Investment)

This is the most common question we get asked and while our formal disclosure documents and other information on this page set out the investment process in detail, the following is a simplified explanation.

  • You complete an application to become a Fund member and discuss your investment preferences with one of our staff. There is no cost to join or invest.
  • You remit your money to us. This earns interest at the initial return agreed to with us from the date your funds are received by us.
  • We confirm your investment by way of a Mortgage Certificate
  • Your initial rate of return is fixed for the first 12 months following investment, after which it reverts to the current Pooled Option return. Each month we will pay you the agreed rate of interest. The rate applicable to the Pooled Option is determined by us from time to time and any reduction in return will be advised to you and not take effect for a period of 90 days following that advice. The current rate paid by the Pooled Option can be found on this website or on your monthly interest statement.
  • You can withdraw your investment subject to 90 days written notice to us and the Pooled Option sub-scheme having sufficient liquidity. If there is insufficient liquidity, we will endeavour to manage the sub-scheme’s cash flow to ensure as far as possible that liquidity is sufficient to meet redemption requests. As liquidity becomes available, outstanding redemption requests will be met in the order in which they are received.
  • You receive an annual statement of interest received for tax purposes.
  • You can request a statement of your account from us at any time.

General FAQ

We provide you with a summary for each proposed investment and ask that you sign an Approval Form (unless you have elected to use our Investor Trust Deposit facility).  The information provided to investors regarding a Sub Scheme is:

  • Commencement date of the investment.
  • The amount of your investment.
  • Total Loan advance.
  • Loan Period.
  • Interest rate payable to you.
  • Frequency of interest payments.
  • Borrower’s name and assessment of creditworthiness.
  • Details of Sub Scheme Property.
  • Amount, method and date of valuation of Sub Scheme Property, and LVR.
  • Mortgage details, including ranking, and details of any other security.
  • Insurance details.
  • Details of the basis and frequency of interest rate reviews (if any).

You will also receive:

  • Monthly interest statements;
  • Annual Tax Statements; and
  • Information concerning new Sub Scheme offers.
Category: General FAQ

No application fees, withdrawal fees or ongoing fees or charges are payable by Members if the Sub Scheme loan runs to maturity without default.

Category: General FAQ

No, there is no cooling-off period. Upon allocation of your funds to a Sub Scheme, there is no cooling off period and you have no right to withdraw from a Sub Scheme. However, participants in our Investor Trust Deposit sub-scheme allow us to allocate their funds to mortgage investments on the basis they can opt out of the investment providing they advise us accordingly within 10 days of the investment being made.

Category: General FAQ

You can invest by downloading a Product Disclosure Statement or Information Memorandum for the Fund you wish to invest in (see the applicable Fund page on this site or go to our Download Page). That document will include an application form which needs to be completed and forwarded to us with the required identification. Our staff will then guide you through the process of selecting investments and depositing your funds into that investment.

Category: General FAQ

Investment in Millbrook Mortgage Fund is open to individuals, companies, trusts and superannuation funds, and any other form of legal entity operating in Australia.

Investment in the Millbrook Income Fund is ONLY OPEN TO WHOLESALE AND SOPHISTICATED INVESTORS as defined by the Corporations Act. For practical purposes, this means:

For practical purposes, this means:

  • You must invest $500,000 or more with us, or
  • You must provide a qualified accountant’s certificate that is not more than 2 years old, evidencing that you satisfy one of the following tests:
    – You have net assets of at least $2.5 million
    – You have a gross income for each of the last 2 financial years of at least $250,000.
Category: General FAQ

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