Better opens crypto-backed mortgages—but buyers need 250% collateral

Better Mortgage has opened applications for a home loan that lets US buyers use Bitcoin towards their deposit without selling it.

Coinbase provides custody for the Bitcoin, while Better handles the lending. The product has now moved beyond its earlier trial, but borrowers must provide more Bitcoin than the amount they receive.

Bitcoin can cover the deposit

A crypto-backed mortgage through Better involves two connected loans.

The first is a conventional mortgage that meets Fannie Mae’s requirements, while the second supplies the cash needed for the deposit and is secured by the borrower’s Bitcoin. It also places a second claim on the property.

According to details on Better’s product page, a buyer seeking a $100,000 deposit loan would need to pledge $250,000 in Bitcoin.

Better holds the Bitcoin in its account on Coinbase until the borrower repays or refinances the loan. Buyers can choose between 15-year and 30-year fixed terms and make one combined monthly payment.

The arrangement allows the borrowers to still hold their Bitcoin and avoid selling it during the purchase, but a large portion of their asset is unavailable for the life of the loan.

Better says Ethereum and Solana will be accepted later, but for now, only Bitcoin is accepted.

Falling Bitcoin prices will not trigger a sale

Better will not ask borrowers to add more Bitcoin if its price falls, and market movements alone will also not trigger liquidation, but missed payments carry a different risk.

Borrowers have 30 days to bring a late account up to date. If the delay reaches 60 days, Better may sell the pledged Bitcoin. Proceedings involving the home begin separately after 180 days, in line with Fannie Mae’s rules.

Coinbase One members who qualify can get a lender credit worth 1% of the mortgage, but capped at $10,000, and that credit can cover closing costs and other fees.

But the information provided by the companies is conflicting at the moment, with Better saying applications are open, while Coinbase’s support page still describes the mortgages as “coming soon.”

Final Summary

• Better now accepts applications for mortgages using Bitcoin to fund the deposit.
• Borrowers must pledge Bitcoin worth 250% of the separate deposit loan.