Triple Threat: 3 Mortgage REITs Projected to Deliver Double-Digit Dividend Yields in 2025

September 11, 2025

High-Yield Mortgage REITs: Navigating risk for Potential Returns

Investors seeking passive income are increasingly turning too Real Estate Investment Trusts, or REITs. These entities are legally obligated to distribute at least 90% of their taxable income to shareholders, often resulting in dividend yields exceeding those of the broader stock market, currently around 1.7% for the S&P 500. However, high yields are invariably paired with increased risk, particularly within the realm of mortgage REITs.

Mortgage REITs operate by acquiring mortgages and distributing the ensuing monthly payments as dividends. This model frequently involves significant leverage, as these trusts borrow funds to maximize their mortgage holdings. Consequently,investors should carefully consider the inherent risks before investing. Despite these concerns, several mortgage REITs present compelling opportunities for investors willing to except a higher risk profile.

Blackstone Mortgage Trust (BXMT): A Return to Profitability

Blackstone Mortgage Trust distinguishes itself as a real estate finance firm specializing in originating and purchasing senior loans backed by commercial properties in North America and Europe. Its portfolio largely consists of floating-rate loans secured by first-priority mortgages on office, hotel, and manufactured housing properties.

Recent financial results, reported on July 30, 2025, reveal a significant turnaround for Blackstone Mortgage Trust. The company achieved a net income of $7.0 million, or $0.04 per share, reversing losses from previous periods. Distributable earnings per share (EPS) increased to $0.19, up from $0.17 in the prior quarter.Despite this enhancement, dividends remained steady at $0.47 per share, translating to an annualized yield of 9.7% based on a share price of $19.36 as of July 29th.

Total revenues reached $133.9 million, with net income from loans and investments at $94.8 million. The company holds total assets of $20.6 billion, supported by a strong liquidity position of $1.1 billion and a debt-to-equity ratio of 3.8x. Portfolio growth reached $18.4 billion,with a notable shift towards multifamily and industrial sectors.Impaired loans have decreased by 55% from their peak, reaching $1.0 billion.

Chimera Investment Corp. (CIM): Facing Headwinds from Rising Rates

Chimera Investment Corporation is a specialty finance company focused on investing in a diverse range of mortgage assets. This includes residential mortgage loans, non-agency RMBS, agency CMBS, and othre real estate-related securities. the company’s profitability is derived from the difference between income earned on assets and associated financing and hedging costs.

Results released on August 6, 2025, indicate a 5% sequential decline in core earnings per share, falling from $0.41 to $0.39 because of lower net interest income and increased provisions for potential credit losses. Book value per share also experienced a minor 1% reduction. The company is currently grappling with the impact of surging interest rates, which have reached 23-year highs, compressing its margins.

Did You Know? Rising interest rates can significantly challenge mortgage REITs like Chimera, as they impact the difference between lending and borrowing rates.

AGNC Investment Corporation (AGNC): Navigating a Challenging Market

AGNC Investment corporation specializes in investing in agency mortgage-backed securities (MBS) on a leveraged basis. Its portfolio features residential mortgage pass-through securities, collateralized mortgage obligations (CMOs), and non-agency MBS, many of which are guaranteed by goverment-sponsored enterprises.

On July 21, 2025, AGNC reported a comprehensive loss of $0.13 per common share for the second quarter. Net spread and dollar roll income reached $0.38 per share.Tangible net book value per share decreased by 5.3% to $7.81, resulting in a -1.0% economic return. The company’s investment portfolio totals $82.3 billion, with leverage at 7.6x tangible net book value.

AGNC has issued 92.6 million shares through ATM offerings, raising $799 million. The annualized net interest spread narrowed to 2.01% from 2.12% in the preceding quarter.

Mortgage REIT Comparison

REIT	dividend Yield (Approx.)	Recent Performance	Key Risk
Blackstone Mortgage Trust (BXMT)	9.7%	Return to profitability in Q2 2025	Commercial property exposure
Chimera Investment Corp. (CIM)	Variable	Core EPS declined in Q2 2025	Rising interest rates
AGNC investment Corporation (AGNC)	Variable	Reported a loss in Q2 2025	Portfolio valuation decline

Understanding Mortgage REIT Risks

Investing in mortgage REITs carries inherent risks. These include interest rate fluctuations, credit risk associated with borrowers, and prepayment risk. Additionally, leverage can amplify both gains and losses.Investors should thoroughly research each REIT and consider their own risk tolerance before investing.

pro Tip: Diversify your portfolio to mitigate risk. Don’t put all your eggs in one basket, especially when dealing with potentially volatile investments like mortgage REITs.

Do you believe the current economic climate favors investment in mortgage REITs, and why?

What factors would cause you to reconsider investing in a mortgage REIT?

Frequently Asked Questions about Mortgage REITs

Q: What is a Mortgage REIT?

A: A Mortgage REIT is a Real Estate Investment Trust that invests in mortgages and mortgage-backed securities, distributing income to shareholders.

Q: Are Mortgage REITs a good investment?

A: They can be, but they carry a higher level of risk than other investments due to leverage and interest rate sensitivity.

Q: What is the role of interest rates on Mortgage REITs?

A: Rising interest rates can negatively impact mortgage REITs by compressing margins and potentially increasing defaults.

Q: How do I evaluate the risk of a Mortgage REIT?

A: Examine the REIT’s portfolio composition, leverage ratio, and financial performance metrics.

Q: What is leverage in the context of REITs?

A: leverage refers to the use of borrowed funds to amplify investment returns, but it also increases risk.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult with a qualified financial advisor before making any investment decisions.

What potential impact coudl fluctuations in mortgage spreads have on the profitability of the featured Mortgage REITs?

For income-focused investors, Mortgage REITs (Real Estate Investment Trusts) offer a compelling opportunity, especially in a fluctuating interest rate habitat. While risk is inherent,certain mREITs are positioned to deliver considerable returns through dividends in 2025. This article spotlights three such contenders, analyzing their strategies, financial health, and projected yields.We’ll focus on key metrics like dividend yield, book value, and interest rate sensitivity to help you make informed investment decisions.

Understanding mortgage REITs & Current Market Conditions

Before diving into specific REITs, it’s crucial to understand the landscape. mREITs primarily invest in mortgage-backed securities (MBS) – pools of home loans. They profit from the difference between the interest earned on these mortgages and the cost of borrowing funds to finance those investments.

Currently, the market is navigating a complex interplay of factors:

Interest Rate volatility: The Federal Reserve’s monetary policy considerably impacts mREIT performance. Rising rates can compress net interest margins, while falling rates can lead to prepayment risk (borrowers refinancing, reducing the REIT’s income stream).

Economic Growth: A strong economy generally supports housing demand and mortgage rates, benefiting mREITs. Conversely, a recession can lead to increased defaults and lower property values.

Mortgage spreads: The difference between mortgage rates and Treasury yields influences mREIT profitability. Wider spreads are generally favorable.

These factors make careful selection paramount. Investors should prioritize mREITs with strong management teams, diversified portfolios, and a proven track record of navigating market cycles.

Annaly Capital Management (NLY) – The Industry Giant

Annaly Capital Management (NYSE: NLY) is arguably the moast well-known mREIT, boasting a substantial asset base and a long history of dividend payments.

Projected 2025 Dividend Yield: 11.5% – 13.0% (based on current estimates and market analysis).

Investment Strategy: Primarily focuses on agency MBS – those guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac. This reduces credit risk but exposes the REIT to prepayment risk.

Key Strengths:

Scale & Diversification: Annaly’s size allows it to access a wider range of investment opportunities and manage risk effectively.

Experienced Management: A seasoned team with a deep understanding of the mortgage market.

Strong Liquidity: Provides adaptability to adjust its portfolio in response to changing market conditions.

Potential Risks: Sensitivity to interest rate fluctuations and prepayment risk. Annaly has been actively diversifying into middle-market lending to mitigate these risks.

Book value: Currently trading slightly below book value, presenting a potential value opportunity.

AGNC Investment Corp (AGNC) – Hybrid Approach for Stability

AGNC Investment Corp (NASDAQ: AGNC) differentiates itself through a hybrid investment strategy, combining agency MBS with non-agency mortgages and mortgage servicing rights (MSRs).

Projected 2025 Dividend Yield: 10.0% – 11.5%

Investment Strategy: A balanced approach. Agency MBS provide stability, while non-agency mortgages offer higher yields (and higher risk). MSRs generate income from servicing fees.

Key Strengths:

Diversified Portfolio: Reduces reliance on any single segment of the mortgage market.

MSR Portfolio: Provides a hedge against rising interest rates, as MSR values increase when rates rise.

strong Capital position: AGNC maintains a conservative capital structure.

Potential Risks: Non-agency mortgages carry credit risk, and MSR values can be volatile.

Book Value: Trades at a slight premium to book value, reflecting investor confidence in its strategy.

Chimera Investment Corporation (CIM) – Opportunistic Investing & risk Tolerance

Chimera Investment Corporation (NYSE: CIM) takes a more opportunistic approach, investing in a wider range of mortgage-related assets, including distressed mortgages and collateralized loan obligations (CLOs).

Projected 2025 Dividend Yield: 12.0% – 14.0% (highest among the three, reflecting higher risk).

Investment Strategy: Focuses on identifying undervalued assets and capitalizing on market inefficiencies. This includes investing in non-qualified mortgages (non-QM) and other higher-yielding,but riskier,securities.

Key Strengths:

High Yield potential: Its opportunistic strategy can generate significant returns in favorable market conditions.

Active Management: A proactive approach to portfolio management