The landscape of home buying is shifting dramatically as Better Mortgage and Coinbase unveil a groundbreaking Bitcoin-backed mortgage product for U.S. homebuyers. This innovative offering enables borrowers to use Bitcoin as collateral for their down payment without having to sell their precious crypto assets.
Launched on August 12, this mortgage product requires borrowers to pledge Bitcoin worth at least 250% of their down payment loan. The Bitcoin is securely held in Better’s custodial account on Coinbase Prime, and it will be returned to the borrower once the mortgage is fully repaid or refinanced. This unique approach not only allows buyers to retain ownership of their Bitcoin but also opens up a new avenue for those who may lack sufficient cash for a traditional down payment.
How It Works
Both the home loan and the down payment loan are structured with the same interest rate and repayment terms, allowing borrowers to make a single monthly payment. Notably, while fluctuations in Bitcoin’s price won’t trigger margin calls or alter the mortgage terms, failing to make payments for 60 days may lead to the liquidation of the pledged Bitcoin.
To qualify for this mortgage product, borrowers must be U.S. residents with a verified Coinbase account, adhering to standard credit and income requirements set forth by Better. Additionally, members of Coinbase One can benefit from a lender credit equivalent to 1% of the mortgage value, capped at $10,000, which can be applied towards closing costs.
Strong Initial Demand
The launch has generated a buzz, with a waitlist revealing over $260 million in projected loan volume before general availability. Notably, 76% of those on the waitlist were already Coinbase One users, and 60% expressed intentions to purchase a home within six months. According to Better, 41% of their pre-approved customers meet income and credit standards but struggle to accumulate enough cash for a traditional down payment.
Furthermore, this product supports both Bitcoin and USDC as collateral, making it adaptable for various crypto holders. The launch of this mortgage product aligns with a broader trend in the lending industry, where more institutions are beginning to recognize the potential of cryptocurrency in mortgage underwriting. Earlier this year, Newrez announced its intent to incorporate certain crypto assets in mortgage applications, and the Federal Housing Finance Agency has encouraged Fannie Mae and Freddie Mac to consider cryptocurrency as part of mortgage risk assessments.
As home prices in the U.S. hover near historic highs, with the median sales price of a new home around $400,000 in 2026, innovative solutions like Bitcoin-backed mortgages could democratize access to home ownership for many. This initiative marks a significant step in bridging the gap between traditional finance and the burgeoning world of cryptocurrency.
