What is Mortgage REIT?

Mortgage REITs are a type of Real Estate Investment Trust (REIT) which offers investors income distributions which result from the interest payment on mortgage loans.

Investors enjoy REIT investments as a high-yield income investment which offers exposure to an asset class which is not necessarily correlated with other major asset classes.

Mortgage REITs are a subset of this asset type which derives income from the interest due on mortgage loans, which are generally purchased in the form of mortgage-backed securities. Equity REITs are the other major type of REIT, and they invest directly in income-producing properties.

There are also hybrid REITs which blend the two. Mortgage REITs are generally somewhat riskier than Equity REITs, since they are exposed to more leverage and interest rate risk. REIT shares trade publicly on major exchanges.

What is a Hybrid REIT?
What is an Equity REIT?