9 Reasons Why Australians Should Consider Pooled Mortgage Funds in 2026

A stable, property-backed alternative as taxes rise and markets stay volatile

As the economic landscape continues to shift in 2026, Australian investors are facing new challenges: unknown interest rate changes, higher property taxes, global market instability and new regulatory pressures affecting both rental property owners and equity investors.

In response, more Australians are exploring pooled mortgage funds, which is a form of private credit investment that provides regular income backed by Australian property. These funds have emerged as one of the strongest-performing alternative investments in Australia, offering diversity, balance, and yield in an unpredictable environment.

Below, we explore why pooled mortgage funds are becoming a preferred investment choice in 2026 and how they compare to traditional property investing.

1. Tax changes in Australia are reducing the appeal of investment properties

In recent years, several federal and state policy adjustments have reshaped the tax landscape for property investors and proposed changes could see an even greater impact. These changes can directly affect the profitability of traditional investment properties.

Higher land tax costs

Some states have increased land tax rates, decreased thresholds or broadened assessment rules. Investors with multi-property portfolios now face materially higher annual holding costs.

Reduced negative gearing benefits

Proposed federal reforms allowing negative gearing on only one property could lower the effectiveness of negative gearing for property investors with more than one property. 

Stricter property depreciation rules

New depreciation rules have reduced allowable claims on second-hand properties and renovated assets. This has further diminished the tax efficiency of holding physical property.

With these changes combined, direct property investments are becoming more expensive and less tax-effective, prompting investors to consider other property-backed options such as pooled mortgage funds.

2. Global market volatility is steering investors toward more predictable income streams

Uncertainty in global economies, fluctuating interest rate policies and ongoing geopolitical instability have led to increased volatility in equity markets. For investors relying on predictable income or stable capital growth, market swings can be unsettling.

Pooled mortgage funds, however, generate returns through contracted interest payments, not day-to-day market movements. This allows them to deliver far more consistency than shares, ETFs or other market-sensitive assets.

3. Rising ownership costs are making traditional property harder to hold

Even aside from tax changes, the ongoing cost of owning an investment property has increased substantially:

• Larger mortgage repayments due to higher interest rates
• More stringent compliance requirements and rental standards
• Rising insurance and strata fees
• Higher maintenance and repair costs
• Tenant management and vacancy risks

For many Australians, these pressures have caused net rental yields to shrink. In contrast, pooled mortgage funds provide property-linked income without the financial and administrative burdens of property ownership.

4. Pooled mortgage funds offer strong yield potential vs. traditional fixed-income products

With term deposits and government bonds offering relatively modest returns, pooled mortgage funds have positioned themselves as a compelling middle ground. They often deliver:

• Higher yields than traditional fixed-income products
• Lower volatility than equities
• Consistent income regardless of market cycles

This balance makes them especially attractive for investors seeking dependable, property-backed returns.

5. Built-in diversification reduces portfolio risk

A key benefit of pooled mortgage funds is diversification across:

• Multiple borrowers
• Different loan types
• Various security properties
• Multiple geographic locations

Instead of relying on the performance of a single tenant or property, investors gain exposure to a broad lending portfolio. This diversification helps reduce risk and smooth out returns over time.

6. Professional management enhances risk control

In a lending environment where borrower quality varies and valuations must be carefully assessed, having professional oversight is critical. Pooled mortgage funds are managed by specialist teams who:

• Source and evaluate borrowers
• Conduct thorough credit analysis
• Maintain conservative loan-to-value ratios
• Manage loan performance
• Oversee recovery processes if needed

This level of professional management removes the complexity and risk that individual investors would face if trying to lend privately on their own.

7. Lower entry point than buying an investment property

Buying an investment property often requires a six-figure deposit, plus stamp duty and upfront costs. For many Australians, that level of capital commitment is difficult.

Pooled mortgage funds provide an accessible alternative, with APG’s minimum investments starting at:

• $10,000 for Retail Investors
• $25,000 for Wholesale Investors

This lower entry point allows more investors to benefit from property-backed income without needing to purchase a physical property.

8. Loan security helps support capital preservation

Mortgage funds are backed by Australian real estate. If a borrower defaults, the property can be sold to recover the loan amount and interest.

At APG, a maximum 75% loan-to-value ratio (LVR) is used as part of risk management, ensuring a meaningful equity buffer on every loan the fund makes. Depending on the risk of the loan we will often lend at a much lower LVR. This conservative approach provides investors with added protection in fluctuating property markets.

9. Consistent income through quarterly distributions

Many investors, particularly retirees and those building passive income, value predictable distributions.

APG’s pooled mortgage fund pays quarterly distributions, allowing investors to enjoy stable, recurring income. Those looking to compound returns may also choose to reinvest through the Distribution Reinvestment Plan.

The Investment Outlook for 2026: Why Mortgage Funds Are Gaining Momentum

Between rising property taxes, global market volatility and the increasing cost of holding traditional investment properties, Australian investors are seeking alternatives that offer dependable returns and real asset backing.

Pooled mortgage funds have emerged as one of the strongest alternative investment options in this climate, providing:

• Property-secured income
• Reduced portfolio volatility
• Competitive returns
• Professional management
• No land tax, council rates, maintenance or tenant risks

As investor priorities shift toward stability, diversification and predictable income, mortgage funds are becoming an important component of modern portfolios.

About APG’s Pooled Mortgage Fund

APG’s pooled mortgage fund is available to both retail and wholesale investors and provides quarterly income backed by a diversified portfolio of secured loans. Investors can also opt into our Distribution Reinvestment Plan to automatically reinvest distributions.

To learn more about the fund or speak with our Investor Relations team, feel free to reach out. We’re here to help you assess whether private credit investing aligns with your financial strategy.

If you have any questions about investing in private mortgages then please send us a message via our Contact Page.