Why a Property Credit Investment Can Outperform in Uncertain Markets

In today’s unpredictable world, volatile stock markets, and geopolitical shocks, many investors are asking:

“Where can I still earn consistent income without taking on additional risk?”

The answer more investors are discovering is: Property credit investment and specifically, first mortgage-backed funds.

Here’s why this strategy can shine during uncertain times.

1. It’s backed by something real: Property

Mortgage investments aren’t tied to share price swings or speculative trends. They’re backed by real property— often residential or commercial land and buildings.

And in most cases, they’re first mortgages, meaning the fund has legal priority to recover the debt if the borrower defaults.

That’s a level of tangible security most investments can’t offer.

2. Monthly income, not market guesswork

When you invest in a mortgage-backed fund, your money is lent to borrowers (usually property investors or developers). In return, those borrowers pay monthly interest, which gets distributed to you.

This means:

• Predictable monthly income
• A consistent cash flow that many term deposits or shares don’t provide

3. Low volatility and low correlation to other asset classes

Mortgage investments aren’t traded on the stock exchange. That’s a huge advantage in volatile times.

While share & bond prices react to:

• Interest rate hikes
• Political news
• Economic forecasts

Mortgage funds are driven by:

• Property values
• Loan-to-value ratios (LVRs)
• Borrower performance

This makes mortgage lending a steadier hand in a shaky market.

4. Conservative lending = Capital protection

At Millbrook, we lend conservatively, typically up to a maximum of 65% of the property’s value. That provides a built-in buffer if property values dip or if a borrower defaults.

Your capital is not exposed like it would be in direct property ownership or equity investing.

We focus on:

• Quality security
• Conservative loan-to-value ratios
• Responsible borrower selection

All of which are key to protecting your investment.

5. Ideal for retirees, SMSFs & income-focused investors

If you’re retired or managing a self-managed super fund (SMSF), you need income you can rely on. Not boom-or-bust returns.

Mortgage lending offers:

• Monthly payments
• Attractive returns (often 6–8% p.a.)
• Lower risk profile than high-yield shares or speculative property investments

It’s also hands-off—you don’t need to be a landlord or a stock picker.

Let’s talk about risk – what you should know

While mortgage-backed funds offer attractive features, it’s important to understand the risks involved:

• Borrower default – If a borrower fails to meet repayments, the fund may need to take possession of the property to recover funds. This can take time and may affect income returns.
• Market fluctuations in property values – While loans are secured, property values can change. If a property drops significantly in value, it could impact the ability to recover the full loan amount in the event of default.
• Liquidity risk – Mortgage funds are not always as liquid as cash. While Millbrook provides flexibility, withdrawal notice periods apply.
• No government guarantee – Unlike term deposits, these investments are not backed by a government guarantee. They carry a different risk-return profile.

That’s why we follow conservative lending policies, assess each loan with strict due diligence, and ensure loans are secured by high-quality, first-ranking mortgages.

Transparency is key—and we always encourage investors to understand what they’re investing in.

The bottom line

In uncertain times, it pays to invest in things that make sense.

First mortgage investments offer:

• Security through real property
• Predictable income paid monthly
• Protection from market volatility
• Confidence through conservative lending practices

Whether you’re looking for a core income solution or a way to balance your portfolio, mortgage-backed investments can deliver consistent returns when other assets are unpredictable.

Ready to explore income you can count on? See Millbrook’s investment options here →

Or submit an enquiry to learn more.