Can You Use Crypto for Mortgage?

Cryptocurrencies are used worldwide to buy different commodities, luxury items, trade, and much more. But is it possible to get a new home by crypto mortgage? When you do not have enough funds, you prefer to take a loan and pay monthly installments for the purchased property.

In the case of fiat money, it is easy to apply for a mortgage and get a loan for several years. But what happens if you use cryptocurrencies? You must be wondering whether the process remains the same or not. There is a slight difference that you must understand before you prefer this option.

The concept of crypto mortgages is not new because many people are involved in this method and purchasing new homes. In the following write-up, we will discuss whether one should use a crypto mortgage for purchasing new houses or not.

Working on Crypto Mortgages

To get an overall idea about its works, you must know that it works the same as the traditional method. But the difference is that you can prefer digital currencies. You can use your holdings as collateral and get a loan for your home. There is no need to pay anything if you are considering this option.

Whenever you ask for this method, the lender will check all the holdings or assets you have in your account. You do not have to share the earning history, payslips, or records to prove your income. You can get a home under various conditions of the lender. There is nothing fixed whether you need specific crypto holdings.

The lender will decide the loan amount and the collateral. Whenever you need to close the mortgage and purchase the property, you have to pay it back in monthly installments. The crypto market is growing rapidly; hence, there is massive competition for buying properties.

Who can Apply for these Mortgages?


Anyone can prefer this method of applying for a home loan, but the person must own crypto assets. Knowing how to deal with the challenges you get while purchasing any property is necessary. It will be your choice if you have wealth in digital currencies.

There is no use in owning crypto assets if you cannot use them for investment or purchasing commodities. You can buy and trade your virtual currencies through the platform.

Pros of Applying for Crypto Mortgages

It is not necessary to cash out the crypto asset you own for taking the mortgage. With this option, you can easily incur taxes from capital gains by selling some of your investments. If you are a foreign citizen and do not want to get stuck in a cash issue, it is also good to prefer this option.

You do not have to provide payslips or any income proof. The lender will not observe the credit score like in traditional loan methods. Many investors think these cryptocurrencies are highly sustainable and profitable to use as collateral.

Cons of Applying for Crypto Mortgages


Using digital currencies to take a mortgage is not as simple as it looks. Undoubtedly, the price of virtual currencies fluctuates because of their volatile nature. Such investments are risky, and many people cannot expect to use their assets to purchase any property.

If the market crashes, the collateral value will go down, and you can suffer a massive loss. If such a situation happens, the lender will ask you to add more coins to the collateral amount. Sometimes, there is a small margin that every lender keeps in case anything happens.

But in the case of a deeper fall, you have to manage to provide more funds to complete the collateral amount. The crypto market is highly volatile, and the price of an asset can fluctuate at any time. Make sure that you keep yourself ready for such challenges. It is necessary to have an extra budget for such a situation.

Is It Necessary to Declare Digital Currencies as Income for Applying for Mortgage?

There is no such facility in the present situation. Lenders cannot accept these virtual currencies as income. Therefore, it is necessary to do an affordability check. It is not easy for financial institutes to manage the risk level.

The volatile market keeps you worried all the time. It is not easy to verify the crypto sources if it is the main income of the borrower. Comparatively, fiat money is considered income, and it is also easy to show proof of income to the lender.

Sometimes, it is risky for a lender to approve a mortgage for buying a home. But now, lenders are quite aware of this technology and know how to deal with the challenges. Every lender keeps a small margin to avoid situations when the market price falls.

Is It Possible to Pay the Mortgage Amount by Digital Currencies?


If you are investing in cryptocurrencies, you might get a profit. You can use profits to pay the mortgage amount. But make sure that you keep anti-money laundering concerns in your mind. If digital currencies are considered the said funds, the lender will agree to get the payment after verifying your capital.

Once it is declared, you have to pay additional tax on your property purchase. It is a deep concept you must research and understand to handle mortgage issues better. When the lender verifies everything, only he will be permitted to pay the mortgage amount using virtual currencies.

The Bottom Line

It is a major concern for many cryptocurrency investors whether they should use it for applying for a mortgage or not. Nowadays, it is possible to do so, but you must be careful when making any decision. Make sure you consider all the pros and cons before preferring this option.

The lender will verify all your details and check whether you are capable enough to repay the loan amount or not. Once done, you can easily get a new house without any hassle. But you must research the process and get plenty of information regarding digital assets before using them for a mortgage.