Crypto Mortgages: How and Where to Get a Cryptocurrency Mortgage Loan

September 24, 2022 - 17 Min Read

Getting a home mortgage backed by your cryptocurrency assets is now possible. We will let you know exactly how to get a crypto mortgage as well as the benefits/drawbacks.

Key Takeaways

  • Some crypto loan platforms let you get a home mortgage by putting up your crypto assets as collateral.
  • The interest rates of crypto mortgage lenders are competitive with that of traditional lenders.
  • Securing a crypto mortgage enables you to avoid cashing in your crypto holdings early and missing out on potential gains.
  • Crypto mortgages are secured by both your crypto and your home as collateral. Because the loan ends up overcollateralized, you will not need to make any down payment when using a crypto mortgage.

What is a crypto mortgage?

A crypto mortgage is a type of mortgage in which you use your crypto holdings as additional collateral to secure the loan. As long as you repay the mortgage on the agreed terms, you'll get back your crypto assets at the end of the loan term.

How does a crypto-backed mortgage work?

Crypto mortgages work similarly to traditional mortgages. You offer your crypto assets as collateral, which paired with the value of your home, means the mortgage ends up overcollateralized.

DeFi-nition

Overcollateralization means the collateral backing a loan is worth more than the the loan itself. As an example, if you pledge $250,000 of Bitcoin to acquire a $250,000 home using a $250,000 mortgage, the lender now has $500,000 in pledged collateral ($250k of BTC and the $250k home) against the $250,000 loan. The combined home and Bitcoin value would need to decrease substantially before the loan became distressed.

Because of this overcollateralization, the lender will typically lend you up to 100% of the value of the home, meaning no down payment is required. Different lenders offer different mortgage interest rates, which will vary depending on the value of your crypto collateral relative to the loan amount. Having sufficient crypto assets is the main criterion for crypto mortgage approval, but lenders also usually look at your credit history, income statement, and the home you intend to purchase.

Crypto mortgage example

Here’s an example of a simple crypto mortgage:

Michael wants to buy a house worth $500,000, and he has $500,000 in BTC in his crypto wallet. Michael is short on cash otherwise, and would not be able to make a 20% downpayment on a traditional mortgage without selling at least 20% of his BTC. However, selling his BTC would create a taxable event, meaning Michael would owe capital gains tax on any profits on the BTC he sold to fund the mortgage down payment. Likewise, Michael feels BTC will appreciate in the near term and is reluctant to sell his holdings.

Michael hears of Milo, a crypto mortgage provider. He checks their website and decides to get a mortgage backed by his BTC. Michael offers his $500k in BTC as collateral and gets his $500k loan wired to his bank account. He then uses the cash to buy the property.

With Milo’s interest rate of 6.95% and a 30-year term, Michael would need to pay about $3,310 monthly to service his mortgage, which is comparable to a traditional mortgage payment. After paying off his mortgage, Michael will receive his BTC collateral back from Milo. If BTC had shot up 3x in the time frame it took Michael to repay his loan, he’s getting back $1.5 million of BTC.

The situation represents a win-win-win– Michael got a loan at a reasonable interest rate, bought a home with no down payment, and was able to retain ownership of his underlying crypto collateral. If he had converted his BTC to fiat to purchase the house, he wouldn’t have reaped any future BTC price gains while also having to pay capital gains taxes on the sold BTC.

However, there are two sides to that coin. If the price of BTC fell by 50%+ during Michael’s mortgage term, he may have to post more cash or BTC as collateral to make up for the shortfall. If he can’t, the crypto mortgage provider may liquidate some of his BTC to avoid losses on their loan. The same thing applies if Michael isn’t able to repay his mortgage for any reason.

To avoid situations where borrowers must post more collateral to make up for a shortfall, crypto mortgage lenders only accept widely-traded coins like BTC and ETH that aren’t too volatile. You’ll likely not find a lender willing to accept meme coins like Dogecoin and Shiba Inu Coin as collateral for a crypto mortgage.

Crypto mortgages vs. traditional mortgages

Traditional mortgages require assets such as cash, stocks, and bonds as collateral, while crypto mortgages use digital tokens as collateral. Traditional mortgages also involve stricter credit checks and verification than crypto-backed mortgages.

Mortgage TypeDown Payment Required?Credit and Income Checks Required?Available to Foreign Nationals For US Property Purchases?Need to Sell Your Crypto To Purchase?Speed of Closing
Crypto MortgageNoNot alwaysYesNo, meaning you can remain invested and reap potential profits.0-30 days
Traditional MortgageYesYesOnly if they have a US Social Security NumberYes, which can incur a taxable event.30-50 days

Steps for getting a crypto mortgage

Step 1: Determine how much you can borrow based on the value of your crypto holdings.

Step 2: Compare interest rates from different crypto mortgage lenders.

Step 3: Sign up for an account with your chosen lender and verify your identity.

Step 4: Apply for the crypto mortgage and provide the required documentation.

Step 5: If approved, deposit your collateral.

Step 6: Receive your funds.

Who would want to use a cryptocurrency mortgage?

Cryptocurrencies are valuable assets, but traditional mortgage lenders won't accept them as collateral. That means you'd need to sell some of your holdings for a mortgage down payment, which can come with considerable tax consequences.

Alternatively, instead of selling your crypto for cash, you can use it directly as collateral for a mortgage from select crypto mortgage lenders. This way, you avoid cashing in your crypto early and losing out on potential future gains.

Crypto mortgages are beneficial for people who have a great deal of their investments parked in cryptocurrencies and not much in other assets. There are several reasons to choose a crypto mortgage over a conventional mortgage, including:

  • No down payment required, unlike traditional mortgages that often require you to pay up to 20% of the property value upfront.
  • The speed of approving crypto mortgages is faster than conventional mortgages due to less demanding identification and credit checks.
  • Individuals with large unrealized crypto gains can acquire a home using their crypto as collateral, without paying capital gains tax on the crypto itself.
  • You don’t have a steady job or income, which will make it difficult for traditional mortgage providers to approve a loan for you.
  • You can buy rental properties using your crypto as collateral. Doing so lets you remain invested in crypto while acquiring real estate assets that’ll bring in regular income.

What crypto assets do lenders accept for a crypto mortgage?

Most crypto lenders tend to accept the most widely-used coins like Bitcoin and Ethereum and stablecoins such as USDC and USDT. The reason is that there’s ample market liquidity for these coins, and they tend to be less volatile than obscure digital tokens.

What happens when crypto assets change in value during the mortgage term?

If the value of your crypto holdings increases during the loan term, it means the collateral becomes worth more than it initially was, and you will benefit from those gains after repaying the mortgage.

On the other hand, if the value of your home and crypto assets slump significantly, you may be required to add more crypto assets as collateral to make up for the difference. If you refuse to add more assets as collateral, the lender may seize and sell your existing asset to make up for the shortfall.

Pros and cons of cryptocurrency mortgages

Pros

  • You don’t have to liquidate your crypto holdings early to fund a property purchase.
  • Your crypto assets might appreciate during the loan term, and you can claim the profits after repaying the loan.
  • Crypto mortgages have less stringent requirements than traditional mortgages.

Cons

  • Crypto lenders tend to have less oversight than traditional banks, which increases their risk of failure.
  • Overcollateralization; putting up excess assets as collateral to get a crypto mortgage.
  • The lender will liquidate your collateral if its value falls too low without you topping it up to make up for the shortfall.

Best crypto mortgage lenders in October 2022

Interest rateMaximum LoanAcceptable collateralDownpaymentMortgage length
Milo6.95%$5,000,000Bitcoin, Ethereum, USDCNone30 years
Figure6.99%$3,000,000Bitcoin, EthereumNone30 years
Ledn7.9%UnspecifiedBitcoinNone2 years
USDC.homes5.5%-7.5%$5,000,000Bitcoin, Ethereum, USDC20%30 years

The recent growth wave in the crypto market has spawned a handful of companies offering crypto-backed mortgages. The most popular include Milo, Figure, Ledn, and USDC.homes.

Milo mortgage

Crypto mortgages

Milo Credit was founded in 2019 to provide mortgages to global crypto consumers. The company provides mortgages backed by crypto assets– a minimum of $200,000 and a maximum of $5,000,000.

Interest RateTermPaymentsDown Payment RequiredCollateral AcceptedClosing TimeOther Offerings
Milo6.95%30-yearCrypto and fiatNoneBitcoin, ETH, and USDC.30 daysRefinancing loans

Eligibility

You need to meet Milo’s eligibility terms in order to secure a loan, which include:

  • At least $200,000 of crypto assets when pledging a mix of BTC, ETH, and USDC, or at least $80,000 when posting only USDC as collateral.
  • A valid government-issued passport or driver's license for identification.

Why get a Milo crypto mortgage?

  • You’re a foreign citizen who wants to buy a U.S. property– Milo doesn’t require a social security number to approve mortgages.
  • Milo lets you refinance mortgages with cryptocurrency.
  • You can secure a mortgage relatively quickly if eligible.

Pros

  • Fast closing time.
  • No down payment.
  • Easy application process.

Cons

  • Few acceptable crypto assets.
  • For U.S. properties only.
  • Must pay off the loan in full if you decide to sell the mortgaged property.

How to apply for a Milo mortgage


Step 1: Visit the official Milo website and see what rate you qualify for.

Milo Crypto Mortgage

Step 2: Click the Get started button and proceed to apply.


Step 3: Enter the address of the property you want to purchase to begin the application process– you’d need to create an account.

Milo crypto mortgage

Step 4: Provide more details about the property you intend to purchase, including the purchase price, escrow deposit, expected rental income (if any), etc.

Step 5: Provide information for identification and verification, including your legal name, phone number, credit score, annual income, and value of crypto and non-crypto holdings. Milo will use this information to determine if you’re eligible for a mortgage.

Milo crypto mortgage

Step 6: Secure your loan offer– append your signature to the loan documents.

Step 7: Validate your information.

Step 8: Deposit your collateral and receive the mortgage in cash in your specified bank account.

Figure crypto mortgage

Figure Crypto Mortgage

Figure is a well-known company that provides home equity lines of credit (HELOCs) based on blockchain technology. In March, it opened a waiting list for crypto-backed mortgages, promising up to $3 million of loans per customer collateralized by Bitcoin or Ethereum. It hasn’t launched this service to the public, so details are limited.

Interest RateTermPaymentsDown Payment RequiredCollateral AcceptedClosing TimeOther Offerings
Figure6.99%30-yearUnconfirmedNoneBitcoin and ETH.30-90 daysHELOCs and traditional mortgage refinancing

Eligibility

Figure says its crypto mortgages will be available to only U.S. residents in select states; Alabama, Arizona, California, Florida, Georgia, Nevada, and New Jersey.

Why get a Figure crypto mortgage?

  • Bitcoin and Ethereum-backed loans, making it suitable for users with most of their crypto holdings in these two assets.
  • Reasonable interest rates.
  • A trusted brand in the cryptocurrency sector.

Pros

  • Long-term, fixed-rate mortgages.
  • Collateral adjustments
  • Complementary features such as HELOCs and an investment marketplace.

Cons

  • US residents only (in select states).
  • Doesn’t accept stablecoins as collateral.


Note that these features are what Figure promises and may not be what users end up getting.

How to apply for a Figure mortgage

For now, you can only provide your email address to join the waiting list.

Ledn crypto mortgage

Ledn crypto mortgage

Ledn is a well-known cryptocurrency investing platform. It offers a crypto-backed mortgage as a complementary service, but there’s a catch; it’s only available in Ontario, Canada. Users in other regions can only get on the waitlist, and Ledn promises that it’ll be available to all other Canadian residents and select American residents later this year.

Interest RateTermPaymentsDown Payment RequiredCollateral AcceptedClosing TimeOther Offerings
Ledn7.9%2-yearFiatNoneBitcoin24 hoursMortgage refinancing

Eligibility

Ledn’s primary eligibility requirement is having at least 130% of the estimated value of the property you intend to purchase in Bitcoin to post as collateral.

Why get a Ledn crypto mortgage?

  • It closes crypto mortgages in as little as 24 hours.
  • If you expect the value of your Bitcoin holdings to soar– you can keep it and get a loan backed by it.
  • Quick (2-year) loans.

Pros

  • The Ledn platform has lots of other crypto investing features.
  • No down payment required.
  • Fast mortgage turnaround time.

Cons

  • Accepts only Bitcoin as collateral.
  • Available only in one Canadian province.
  • Short loan term.

Pros

  • The Ledn platform has lots of other crypto investing features: Ledn is a comprehensive platform with many features apart from mortgages. For instance, you can invest your crypto assets and earn interest or access loans to buy crypto assets.
  • No down payment required: Most traditional mortgage lenders will require you to put up a certain percentage of the mortgage value upfront. Ledn doesn’t have this requirement.
  • Fast mortgage turnaround time: Ledn has an unusually speedy time lapse between applying for a mortgage and getting it– as low as 24 hours as it claims.

Cons

  • Accepts only Bitcoin as collateral: Bitcoin is the only crypto asset Ledn accepts as collateral for mortgages. If you have your wealth parked in other crypto assets, you’d have to convert them, which can incur significant fees.
  • Available only in one Canadian province: For now, Ledn mortgages are only available for properties in Ontario, Canada.
  • Short loan term: The mortgage loans Ledn offer mature in 2 years, much shorter than the 30-year horizon other platforms offer.

How to apply for a Ledn mortgage


Step 1: Fill in your details on the application form on the Ledn website.

Ledn Crypto Mortgage

Step 2: Wait for a Ledn employee to contact you via your email or phone number regarding eligibility and how to proceed with the loan. Ledn is still in the early stages of offering a crypto mortgage, so a lot of steps in getting it are informal and don’t follow a standard procedure.

USDC.homes crypto mortgage

USDC.homes crypto mortgages

USDC.homes is a decentralized finance “DeFi” project that, as the name suggests, offers mortgages backed by the USDC stablecoin (plus ETH and BTC). For now, it’s only available to American residents in the state of Texas.

Interest RateTermPaymentsDown Payment RequiredCollateral AcceptedClosing TimeOther Offerings
USDC.homes5.5%-7.5%30-yearFiat or crypto20%USDC, Bitcoin, and Ethereum30 daysNA

Eligibility

As a DeFi project, USDC.homes offers great flexibility– the only requirement is your crypto assets.

Why get a USDC.homes crypto mortgage?

  • Flexibility.
  • You can earn interest on your down payment via staking.
  • Suitable if you earn your income primarily in cryptocurrency

Pros

  • Low interest rates.
  • Easy to apply.
  • Fast closing time.

Cons

  • Requires significant down payment.
  • Available only in Texas.
  • Riskier (no centralized authority.)

How to apply for a USDC.homes mortgage

Step 1: Fill in your details in the application form on the USDC.homes website.

Step 2: Wait for a member of the USDC.homes team to contact you for a follow-up.

Crypto mortgage rates

Crypto MortgageInterest Rate
Milo6.95%
Figure6.99%
Lendn7.9%
USDC.homes5.5%-7.5%

Crypto mortgage calculator example

Here’s the breakdown of a hypothetical crypto mortgage of $500,000 with no down payment secured through Milo, with a standard interest rate of 6.95% and a 30-year term.

  • Purchase price in USD - $500,000. You’d need that equivalent in crypto to secure the loan.

The formula for calculating mortgage monthly payments is M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where:

  • M = Total monthly payment
  • P = The total amount of your loan ($500,000)
  • I = Interest rate, as a monthly percentage (6.95÷100÷12= 0.0058)
  • N = The total number of months in the timeline for paying off the mortgage (30 years x 12 months = 360 months).

It gives M = 500,000 [ 0.0058(1 + 0.0058)^360 ] / [ (1 + 0.0058)^359-1]. To solve, calculate (1+.0058)^360 first. It gives 8. Then, solve for (1+0.0058)^359-1; it gives 8-1 =7.

Hence, the calculation becomes M = 500,000 [.0058(8)]/[7]. Solve the math within the brackets, and it becomes M = 500,000[0.662]. Taking this calculation, the final answer becomes $3,314 as your monthly payment.

Note that we approximated all numbers five spaces past the decimal point, so $3,314 won’t be the exact figure. Likewise, this calculation doesn’t factor in taxes and insurance premiums, which can vary depending on the property’s location. Milo also adjusts the interest rate depending on certain factors.

Final thoughts on crypto mortgages

Crypto-backed mortgages are one of the latest innovations in the cryptocurrency industry that you can take advantage of. They work similarly to traditional mortgages but with crypto assets posted as collateral. Unlike traditional mortgages, they’re faster to get and often require no down payment or set monthly payment.

Crypto assets have significant potential to appreciate, and if you’re making that bet, it’s advisable to use your assets as collateral for a cash mortgage instead of selling them and incurring tax liabilities or missing out on potential gains. This way, if the value of your collateral increases, you can reclaim it after repaying the mortgage.

We’ve given you good examples of crypto mortgage providers and how you can apply through them.

Frequently asked questions

  • Can I get a mortgage with crypto?

  • What is a crypto mortgage company?

  • How does Milo crypto mortgage work?

  • Can you buy a house with Bitcoin?

  • How much cryptocurrency do I need for a cryptocurrency mortgage loan?

  • Can I refinance a loan with cryptocurrency?

  • Is a crypto mortgage faster than a traditional mortgage?

  • Where is the crypto held during the duration of the loan?

  • Do mortgage lenders look at cryptocurrency?

  • Does the borrower have to personally guarantee the crypto mortgage?