Real estate investment trusts, or REITs, are a great source of passive income as they are required by law to distribute at least 90% of their taxable income in the form of dividends. As a result, REITs typically have higher yields than the broader market (the S&P 500 Index yields 1.7% currently).
Of course, along with high yields can come high risk. This is especially true for mortgage REITs.
These trusts purchase mortgages and then use the monthly mortgage payments to distribute dividends. Mortgage REITs typically borrow money to acquire mortgages, which makes them highly leveraged.
As a result, their high dividends should be considered risky. For investors willing to take the risk, these 3 mortgage REITs have high yields and could generate strong total returns.
1. Blackstone Mortgage Trust (BXMT)
Blackstone Mortgage Trust is a real estate finance company primarily involved in the origination and purchase of senior loans collateralized by commercial properties in North America and Europe. The vast majority of the company’s asset portfolio is comprised of floating rate loans secured by first priority mortgages primarily derived from office, hotel, and manufactured housing properties.
On July 30, 2025, Blackstone Mortgage Trust, Inc. reported its financial results for the second quarter of 2025. The company posted net income of $7.0 million, or $0.04 per share, a return to profitability from a $0.00 EPS in Q1 2025 and a $61.1 million loss in Q2 2024.
Distributable EPS was $0.19, up from $0.17 in Q1, while Distributable EPS prior to charge-offs reached $0.45, compared to $0.42 previously. Dividends remained at $0.47 per share, yielding 9.7% annualized based on the July 29 share price of $19.36.
Total revenues were $133.9 million, with net income from loans and investments at $94.8 million after $264.7 million in interest expenses. The balance sheet showed total assets of $20.6 billion, including $19.0 billion in net loans receivable after CECL reserves.
Equity stood at $3.6 billion, with book value per share declining to $21.04 from $21.42 in Q1, reflecting $4.39 per share in reserves. Liquidity was strong at $1.1 billion, with a 3.8x debt-to-equity ratio.
The portfolio grew to $18.4 billion across 144 loans, up $1.4 billion over two quarters, with 82% of Q2 originations in multifamily and industrial sectors, and 68% international. Office exposure dropped to 28% from 36% year-over-year.
Impaired loans fell 55% from peak to $1.0 billion, with $0.2 billion resolved above carrying value. CECL reserves held steady at $755 million (3.8% of principal), and portfolio performance was 94%.
2. Chimera Investment Corp. (CIM)
Chimera Investment Corporation is a real estate investment trust (REIT) that is a specialty finance company. The company’s primary business is in investing through subsidiaries in a diversified portfolio of mortgage assets, including residential mortgage loans, Non-Agency RMBS, Agency CMBS, and other real estate related securities.
Chimera’s income is predominantly obtained by the difference between the income the company earns on its assets and financing and hedging costs.
The company funds the purchase of assets through several funding sources: asset securitization, repurchase agreements (repo), warehouse lines, and equity capital.
In early August, Chimera released (8/6/25) results for the second quarter of fiscal 2025. Its core earnings-per-share dipped -5% sequentially, from $0.41 to $0.39, due to lower net interest income and higher provisions for credit losses.
Chimera missed the analysts’ consensus by $0.05. Book value per share decreased -1%.
Chimera has been facing a strong headwind from the surge of interest rates to nearly 23-year highs. An unexpected increase in interest rates is a strong headwind for Chimera, as it exerts great pressure on its margins, i.e., the difference between lending and borrowing rates, without allowing the company to hedge its rates.
At the same time, Chimera would benefit from falling interest rates.
3. AGNC Investment Corporation (AGNC)
American Capital Agency Corp is a mortgage real estate investment trust that invests primarily in agency mortgage–backed securities (or MBS) on a leveraged basis.
The firm’s asset portfolio is comprised of residential mortgage pass–through securities, collateralized mortgage obligations (or CMO), and non–agency MBS. Many of these are guaranteed by government–sponsored enterprises.
On July 21, 2025, AGNC Investment Corp. reported its financial results for the second quarter of 2025. AGNC Investment Corp. reported a comprehensive loss of $0.13 per common share for Q2 2025, comprising a net loss of $0.17 per share and $0.05 other comprehensive income.
Net spread and dollar roll income was $0.38 per common share, excluding a $0.01 catch-up premium amortization benefit.
Tangible net book value per common share decreased 5.3% to $7.81 from $8.25, yielding a -1.0% economic return, driven by $0.36 dividends and a $0.44 decline in book value. The investment portfolio totaled $82.3 billion, including $73.3 billion in Agency MBS and $8.3 billion in TBA securities, with leverage at 7.6x tangible net book value.
Unencumbered cash and Agency MBS reached $6.4 billion, 65% of tangible equity. The annualized net interest spread was 2.01%, down from 2.12% last quarter, with a portfolio CPR of 8.7%. The company issued 92.6 million shares via ATM offerings, raising $799 million.
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Disclosure: No positions in any stocks mentioned
