Better Launches Bitcoin Mortgage Product with Coinbase

Better Mortgage has launched a Bitcoin mortgage product in partnership with Coinbase, which went live last week. Borrowers can pledge Bitcoin at a 250% collateralization rate to pay for a home down payment. For example, to purchase a $500,000 property, a borrower would need to pledge $250,000 in Bitcoin to support a $100,000 down payment. Since its launch, the pre-application loan volume has reached $360 million, exceeding the previous estimate of $260 million. At closing, borrowers will receive two loans: one is a conventional mortgage secured by the property, and the other is a down payment loan secured by the pledged Bitcoin and a second lien on the property. Better may re-pledge the Bitcoin pledged by the borrower, who must retain an equivalent amount of assets for repayment. Borrowers cannot withdraw their crypto assets early and must wait until the conventional mortgage is fully repaid or refinanced to recover them, with Bitcoin potentially locked for up to 15 to 30 years. Unlike typical crypto loans, a drop in Bitcoin's price will not trigger margin calls or automatic liquidations; liquidation of pledged assets may only occur 60 days after a borrower defaults. Coinbase acts solely as a custodian and technology provider and does not participate in credit decisions. Currently, the product only supports Bitcoin collateralization.

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