Coinbase and Better launch crypto-backed mortgages, allowing Bitcoin holders to buy property without liquidating their assets

Coinbase and mortgage platform Better Home & Finance announced a partnership to launch a home loan product secured by Bitcoin or USDC, guaranteed by Fannie Mae. Borrowers do not need to sell their crypto assets; they can use them as collateral to apply for an independent loan to pay the down payment while also being approved for a standard mortgage, ultimately holding two loans with the same interest rate and repayment period, with monthly payments combined.

The product complies with Fannie Mae guidelines, with interest rates significantly lower than traditional crypto-backed loans. If the price of Bitcoin drops, the collateral will not face forced liquidation due to market fluctuations, only facing liquidation risk after 60 days of overdue payments. Borrowers using USDC as collateral can offset part of the loan interest with the earnings generated from the collateral.

Coinbase One members can complete transactions through Better and receive a rebate on transaction fees equivalent to 1% of the mortgage amount, capped at $10,000. The two companies stated that they plan to expand the range of eligible collateral to include tokenized stocks and fixed-income assets in the future.