When you hear mREITs, mortgage real estate investment trusts that earn income from interest on mortgage loans, not from owning buildings. Also known as mortgage REITs, they’re a different kind of real estate play—focused on debt, not bricks and mortar. Unlike regular REITs that buy apartment complexes or office towers, mREITs buy pools of home loans, commercial mortgages, or government-backed securities. They make money by borrowing cheaply and lending at higher rates, pocketing the spread. That’s why their dividends often look tempting—sometimes 8%, 10%, even higher. But that high yield comes with serious trade-offs.
What makes mREITs move? Interest rates, the cost of borrowing that directly affects how much mREITs can profit from their loan portfolios. When the Fed raises rates, mREITs often get squeezed because their borrowing costs rise faster than the income from older, fixed-rate loans. On the flip side, when rates fall, refinancing booms, and mREITs lose money as borrowers pay off loans early. Leverage, the amount of borrowed money mREITs use to boost returns is another big factor. Some use 10x or more leverage—meaning a 5% drop in asset value can wipe out their entire equity. That’s why you’ll see their stock prices swing wildly during market stress. They’re not for investors who want to sleep well at night.
But they’re not all risk and no reward. Some mREITs focus on government-backed loans like those from Fannie Mae or Freddie Mac, which are safer than private mortgage debt. Others specialize in commercial mortgages or agency pass-through securities. The key is knowing what’s in the portfolio—not just the dividend yield. You’ll find posts here that break down specific mREITs, compare their leverage ratios, explain how they hedge interest rate risk, and show which ones survived the 2022 rate hike storm. You’ll also see how they fit alongside traditional REITs, bond funds, and dividend stocks in a real portfolio. This isn’t about chasing the highest payout. It’s about understanding the mechanics, spotting the traps, and finding ones that actually make sense for your goals.
If you’re looking for income that’s higher than savings accounts or Treasuries, mREITs are one of the few options that deliver. But they’re not passive. They demand attention. Below, you’ll find real analysis—not hype—on how they behave, who they suit, and what to watch for next.
