Mortgage trusts are one of the oldest examples of a collective investment scheme. Under this model, investor funds are pooled together in a trust, with delegated authority given to a management company (in our case First Mortgage Managers Limited) who oversee the trust and select suitable lending opportunities in accordance with the ruling trust deed.

All investments involve risk.

With any investment there is a chance the return may be different from what is expected. The key to our success has been the first-mortgage investment security we require when lending (via first mortgages on New Zealand land and buildings with relatively conservative loan to valuation ratios). This is further supported by the lending process we have elected to have in place before any investor funds can be placed with borrowers.

What this means is; our internal team assess and recommend loans for approval; then our independent credit team make the decision on whether to proceed with the loan.

Our appointed supervisors add another layer of oversight, providing our investors with confidence that their money is in good hands and only being invested in accordance with the Trust Deed.

For more information on risk, please refer to the Product Disclosure Statements.

The Fund charges are estimated at 1.7% of the Fund value including gst. This is subject to change.

We also reserve the right to charge a withdrawal fee of 2% of the amount withdrawn during the first year of investment in units and 1% of the amount withdrawn during the second year of investment. There is no withdrawal fee for investors who withdraw after their second year of investment.

There are no upfront fees when you invest with First Mortgage Trust. At the end of each quarter, the rate of return we declare is net of all fund charges and expenses, so what you see on our statements is what you’ll get delivered directly into your account (other than amounts deducted to pay tax).

In return for your investment, you receive units in the fund you choose – either the First Mortgage Trust Group Investment Fund or the First Mortgage PIE Trust.

The value of the units in the First Mortgage Trust Group Investment Fund is based on the market value of the Fund at the relevant time. The value of new units is based on the value of the Fund on the business day before your application for units is received. The value of the Fund is, in summary, the value of deposits with banks and the market value of the loans, less liabilities including undistributed income and the reserve fund value.

We aim to maintain the unit price at $1.00 on an on-going basis. However, the unit price may go up or down because of changes in market conditions and other factors.

The First Mortgage PIE Trust invests in the First Mortgage Trust Group Investment Fund. The value of its units reflect the value of the units it holds in the First Mortgage Trust Group Investment Fund, plus its cash holdings.

Your investment is not locked in for a specific amount of time. We do encourage investors to invest for a minimum of two years. This is because mortgage lending terms are generally 18 months to 2 years, so this timeframe is generally aligned to the Fund’s underlying investments. Also, no withdrawals fees are payable on withdrawals after two years from investment.

You need to be aware that in certain circumstances withdrawals could be suspended or deferred.

To withdraw your funds from a First Mortgage Trust Fund you must complete a Notice of Withdrawal.

Withdrawals are normally actioned twice a week (on Monday and Thursday). We generally action withdrawals within four business days of receiving your completed Notice of Withdrawal.

A Notice of Withdrawal must be for at least 100 units or the whole amount of your investment if less than 500 units.

To view our next withdrawals date – click here

You need to be aware that in certain circumstances withdrawals could be suspended or deferred.

Distributions (being the income earned on the Fund’s investments after the payment of tax, fees, expenses and reserve fund contributions) are calculated quarterly at the end of March, June, September and December in each year. Our usual practice is to pay the distributions to investors on the last business day of each of those months. This may take longer in limited circumstances.

You can elect to re-invest your distributions in the Fund. If your distriubtion in a quarter is less than $25 we can choose to re-invest your distribution in the Fund.

Investments in the Fund must be at least $500 on joining. Subsequent investment in the Fund must be at least $100 by a one-lump sum payment at any time, or at least $100 monthly by automatic payment.

When depositing new funds and additional funds you will require our bank account details and your investment number. All you need to do is go into your internet banking and go to Payees and type in First Mortgage Trust. This will populate our account details for both the PIE Trust and the Group Investment Fund and if your investment number starts with a “D” this is the Group Investment Fund if your investment number begins with a “P” this is the PIE Trust. Then you choose the appropriate account and use your investment number as the reference number.

We may ask you to provide information to support your deposit – this helps us comply with our legislative requirements under the Anti-Money Laundering & Countering Financing of Terrorism Act 2009 (AML/CFT Act).

First Mortgage Trust are no longer issuing Tax Certificates.

Inland Revenue now has your tax information available through your personal myIR account. Information on how to register for Inland Revenue’s myIR is available through their website – ird.govt.nz

Your four quarterly income statements sent by First Mortgage Trust also detail the tax deducted.