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Intra-family loans Another investment-income planning strategy involves lending money to family members. If, for instance, a family member is seeking a mortgage, you may want to consider acting as the lender. Currently, the minimum rate that you would be required to charge the mortgage recipient, the applicable federal rate, is low relative to expected future rates given efforts to combat inflation. The potential financial benefit for you is that the arrangement could generate a better rate of return than you would obtain by keeping the money in a conventional investment. If the loan is secured by the residence, and the mortgage is duly recorded, the borrower (e.g., your relative) may be able to deduct the interest. By obtaining a loan from you instead of a financial institution, the borrower will pay considerably less interest in the long run.