Can I get my money out of a mortgage fund? A practical guide

You can usually withdraw from a mortgage fund by lodging a redemption request, but when and how much you receive depends on the fund’s own rules. Most funds can extend notice periods, cap withdrawals or suspend them entirely. If yours has, read the redemption terms, ask the manager specific questions and check whether hardship withdrawals are available.

If you are reading this because your money is stuck, it helps to know that your position is common. In August 2026 several Australian private credit funds, including Centuria Bass and CVS Lane, paused or limited redemptions. Here is a calm, step-by-step way through it.

Step 1: What do your fund’s documents actually say?

Start with the product disclosure statement (PDS) for a retail fund, or the information memorandum (IM) and trust deed for a wholesale fund. The marketing page will say “monthly liquidity”; the legal documents will say what the manager is allowed to do.

Look for these clauses:

Most funds give the manager wide discretion. That is not necessarily a sign of wrongdoing; it is how pooled funds protect remaining investors when many want out at once. But it means your timing is not yours to control.

Step 2: Is your fund gated, frozen or just slow?

It matters which, because each has a different path out.

Slow. The manager is using an extended notice period. Your request stays valid and should be paid when the period ends.

Gated. Withdrawals are capped, for example at 1% of the fund a month. Your request is paid in part each period, usually pro rata with other investors, until it is filled.

Frozen. Withdrawals are suspended. ASIC describes a frozen fund as one where the manager “has suspended members’ (investors’) rights to redeem or withdraw their investments”. You receive money only when the manager lifts the freeze, makes a withdrawal offer, or winds the fund down.

For registered schemes that are no longer liquid, ASIC notes the manager may make withdrawal offers to all members when it has enough cash, including periodic “rolling” offers where ASIC relief has been obtained. For our wider explanation of why this happens, see what is a redemption freeze.

Step 3: Can you apply for a hardship withdrawal?

Possibly, if your fund is a registered scheme and the manager offers them. ASIC’s information sheet INFO 159 sets out the grounds:

• Financial hardship: you cannot meet reasonable living expenses for yourself or your dependants.
• Unemployment: out of work for three months or more with no other support.
• Compassionate grounds: for example medical treatment, disability modifications, funeral costs, terminal illness care, or to prevent foreclosure on your home.
• Permanent incapacity: you can no longer work because of illness or injury.

Eligible members can withdraw up to $100,000 per calendar year, across up to four withdrawals. The catch is important: ASIC says a responsible entity “is not obliged to offer hardship withdrawals or grant a hardship withdrawal requested by a member”. Wholesale, unregistered funds are governed by their trust deed, so ask the trustee directly what discretion it has.

Step 4: What should you ask the manager?

Put your questions in writing and keep copies. A good manager will answer plainly.

1. How much is currently waiting in the redemption queue, and how will it be paid: pro rata or in order?
2. When are the fund’s loans due to repay over the next 12 months?
3. What share of the fund is lent to construction, land or unsold stock?
4. Are distributions of income continuing, and at what rate?
5. When will the freeze or gate next be reviewed, and what would lift it?
6. When were the loans last valued, and by whom? ASIC has warned about valuations lagging economic reality.
7. Do any investors hold side letters with better redemption terms? ASIC’s REP 820 found some funds offering exactly that.
8. Are hardship withdrawals available, and how do I apply?

If the answers are vague, or you believe the fund was not as described when you invested, speak to your own adviser or lawyer about your options.

Step 5: How long will it take to get your money out?

There is no single answer, and anyone who gives you a firm date without seeing the loan book is guessing. The 2026 examples give a range. Centuria Bass expected its pause to last two to six months. CVS Lane planned to reassess by 31 October 2026. In the GFC, some freezes ran for years, and LM Investment Management’s First Mortgage Income Fund took until around August 2024 to make its final distribution. The history is in lessons from Australian fund collapses.

The most useful signal is the loan maturity profile. If most loans repay within a year and few are construction or land, cash should return steadily. If the book is long and development-heavy, expect a longer wait.

Can you sell your units instead of waiting?

Sometimes. If you hold units in a listed trust on the ASX, you can sell on market at any time, but the price is whatever buyers will pay that day, which may be below the value of the underlying loans when sentiment is poor.

Units in an unlisted fund are harder. Some managers or platforms facilitate transfers between investors, and occasionally specialist buyers will offer to purchase units in a frozen fund, usually at a discount. Before accepting any offer, compare the discount with the time you expect to wait, check the fund’s latest valuation date, and get independent advice. A quick exit at a steep discount can turn a delay into a permanent loss.

Keep records of every request, notice and reply. If the fund is later wound down or a claim arises, a clear paper trail makes your position much easier to establish.

How do you make sure this never happens again?

Once your money is back, the lesson is structural. A pool can lock you in because your exit depends on other investors and on loans you cannot see. Change those two things and the problem changes with them.

HomeSec Business Finance, an Australian private lender founded in 2004, funds most of its loans off its own balance sheet and invites wholesale investors to co-fund some of them. You choose a specific loan from its due diligence pack and are named on the registered mortgage for your exact contribution. HomeSec’s own money sits in the same loan.

How should you structure your next investment?

A few principles make a lock-in far less likely, whatever you invest in.

Match the term to your needs. If you may need the money within a year, choose assets that mature within a year, rather than a fund that merely promises you can redeem.

Hold your interest directly. Your name on the security means your exit depends on your loan, not on a pool.

Stagger maturities. Spread capital across several loans with different end dates so money comes back in stages.

Avoid development exposure. Construction and land loans are the slowest to repay. HomeSec does not lend on them.

Keep a reserve. No lending investment is a bank deposit, and none is covered by the Financial Claims Scheme.

More on exits is on getting your money back, and our guide to short term investments for large balances looks at the wider options.

If you’d like to see how a loan with a fixed maturity and a direct repayment works in practice, register your interest and our Funding Manager will be in touch.