First Trust Mortgage Income Fund Decreases its Monthly Common Share Distribution to $0.065 Per Share for August

First Trust Mortgage Income Fund (the “Fund”) (NYSE: FMY) has decreased its regularly scheduled monthly common share distribution to $0.065 per share from $0.075 per share. The distribution is payable on August 15, 2016, to shareholders of record as of August 3, 2016. The ex-dividend date is expected to be August 1, 2016. The monthly distribution information for the Fund appears below.

A portion of this distribution may come from net investment income, net short-term realized capital gains or return of capital. For the fiscal year-to-date November 1, 2015, through June 30, 2016, it is estimated that FMY has over distributed its tax basis net investment income by approximately 54%. This percentage can change based upon the Fund’s activity from June 30, 2016 through its fiscal year-end, October 31, 2016. The final determination of the source and tax status of all distributions paid in 2016 will be made after the end of 2016 and will be provided on Form 1099 DIV.

As a result of the continued decline in interest rates and the expectation that they will remain low, a reduction in FMY’s monthly distribution is necessary to bring it more in line with its current earnings. The Fund holds a large portion of its assets in higher credit quality investment grade securities. Therefore, the Fund’s earnings are more significantly impacted by a lower interest rate environment than a lower credit quality portfolio. It is anticipated that the Fund will perform better in a higher interest rate environment.

The Fund is a diversified, closed-end management investment company that seeks to provide a high level of current income. As a secondary objective, the Fund seeks to preserve capital. The Fund pursues these investment objectives by investing primarily in mortgage-backed securities representing part ownership in a pool of either residential or commercial mortgage loans that, in the opinion of the Fund’s investment sub-advisor, offer an attractive combination of credit quality, yield and maturity.

First Trust Advisors L.P., the Fund’s investment advisor, along with its affiliate, First Trust Portfolios L.P., are privately-held companies which provide a variety of investment services, including asset management and financial advisory services, with collective assets under management or supervision of approximately $96 billion as of June 30, 2016 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts.

Brookfield Investment Management Inc. ("Brookfield") serves as the Fund's investment sub-advisor. Brookfield is a wholly-owned subsidiary of Brookfield Asset Management, a global alternative asset manager with $240 billion in assets under management as of March 31, 2016. Brookfield Asset Management has over a 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity. Brookfield Asset Management’s public market activities are conducted by Brookfield, a registered investment advisor, with over $16 billion of assets under management as of March 31, 2016.

Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.

Principal Risk Factors: Investment in this Fund involves investment and market risk, management risk, credit risk, prepayment risk, reinvestment risk, interest rate risk, floating rate CMOs and inverse floating rate CMOs risk, bond market risk, economic sector risk, inflation risk, U.S. government securities risk, government agency risk, asset-backed securities risk, market discount risk, leverage risk, interest rate transactions risk, derivatives risk, market disruption risk, portfolio turnover risk, tax risk relating to investments in certain REMICs, and illiquid/restricted securities risk. The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings.

The Fund’s daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at www.ftportfolios.com or by calling 1-800-988-5891.

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