In the northeastern United States, a unique property transaction took place this summer, marking a growing trend in mortgage financing. A five-bedroom home was purchased using a loan secured by bitcoin, a move that reflects increasing acceptance of cryptocurrency within traditional real estate markets. The buyer, identified only as Jonathan to preserve anonymity, put down a $130,000 deposit financed through a bitcoin-backed loan, while also taking out a conventional mortgage backed by the property itself.
Jonathan, 63, holds a significant portion of his wealth in bitcoin and was reluctant to sell his digital assets to cover the home purchase. Instead, he secured the loan by collateralizing bitcoin valued at 2.5 times the loan amount, which is held in a custody account by the cryptocurrency exchange Coinbase. The combined monthly payments on both loans total close to $5,000 at an interest rate of 7.5 percent over 30 years. Jonathan expressed confidence that as long as bitcoin’s value appreciates at a rate exceeding his mortgage costs, the arrangement is financially advantageous.
This transaction was facilitated by Better, a mortgage group, in partnership with Coinbase. The development follows an instruction last year from the Federal Housing Finance Agency’s director, Bill Pulte, who directed government-backed mortgage entities Fannie Mae and Freddie Mac to prepare to recognise cryptocurrency as a valid asset in mortgage lending. While Jonathan’s conventional mortgage qualifies for Fannie Mae backing, the bitcoin-backed portion does not. Despite this, the initiative has drawn considerable interest; Better’s chief technology officer Ziggy Jonsson said thousands have joined the waiting list for crypto mortgages, with a significant share of applicants holding at least $500,000 in cryptocurrency.
Crypto mortgages remain niche but are gaining attention as a way for individuals with substantial digital asset holdings but limited cash liquidity to secure property financing without liquidating their crypto investments. However, risks persist: the volatility of digital currencies, regulatory scrutiny, and concerns around money laundering remain challenges for lenders. For instance, the European Union’s Anti-Money Laundering Authority recently highlighted digital assets as high-risk for illicit financial activities.
In contrast to the United States, the UK has yet to introduce specific crypto mortgage products. While individuals in Europe can obtain loans secured against crypto holdings, such arrangements function more like traditional asset-backed loans rather than dedicated crypto mortgages. The UK’s upcoming regulatory framework, effective next year, will impose stricter controls on crypto lending, including requirements for over-collateralisation.
Industry experts note that demand for crypto-backed mortgages exists among high-net-worth clients, particularly in global property markets such as London, Dubai, and Bali. However, the prospect of government-supported crypto mortgage programs similar to those emerging in the US appears unlikely in the near term. UK regulators continue to caution about the high volatility of cryptocurrencies and the attendant financial risks for consumers.
Critics within the US housing sector caution against integrating cryptocurrency too deeply into mortgage financing, particularly when government-backed entities like Fannie Mae are involved. Sharon Cornelissen, housing director at the Consumer Federation of America, described such moves as potentially problematic, given taxpayer exposure and the complexity of assessing cryptocurrency’s legitimacy and source.
The risk of price declines also remains a concern. Some lenders, such as Miami-based Milo, stipulate that borrowers may need to post additional collateral or face liquidation of their crypto holdings if values drop significantly. In contrast, Better’s program does not include margin calls despite bitcoin’s recent 25 percent price decline over the past year. Its executives cite substantial over-collateralisation and the property itself serving as security for the loans.
Jonathan, meanwhile, remains bullish on bitcoin’s long-term potential, anticipating its value could reach $1 million by 2032. He sees the crypto-backed mortgage as a pragmatic solution that allows him to retain his digital assets while acquiring real estate. “I don’t really compliment the government, but I really am appreciative that this programme was made available,” he said, reflecting a sentiment shared by other crypto enthusiasts exploring this emerging financing option.