Coinbase and Better Mortgage Launch Bitcoin-Backed Mortgage Product

Bitcoin has become an acceptable form of collateral for mortgage applications in the US thanks to a new product launched by Coinbase and Better Mortgage.

The partnership allows homebuyers to use their Bitcoin as security for a down payment without selling it, making it easier for people to buy homes.

Borrowers must pledge at least 250% of the down payment loan amount in Bitcoin, which is then transferred to a custodial account within Coinbase Prime.

The loan structure combines a Fannie Mae-guaranteed mortgage with a Bitcoin-backed down payment loan. The two loans carry the same interest rate and repayment period, and borrowers make one monthly payment.

Borrowers can get back their Bitcoin after fully repaying or refinancing the mortgage, but if they default on payments for more than 60 days, Better Mortgage can liquidate the collateral Bitcoin.