[Stanley]

How to buy a home with a crypto-backed loan




Discover platforms offering crypto-backed mortgages, allowing you to use digital assets like BTC and ETH to finance real estate purchases without selling your holdings.



https://cointelegraph.com/news/how-to-bu...er_inbound

[Braco22]

This is something that will transform the lending sector. Now instead of selling 2 BTC to buy your dream home, you can just take a loan against that BTC and enjoy it appreciate over the time, while your dream home also appreciates but the USD you have taken a loan depreciates. WIN, WIN and WIN. Triple win situation!

[Omniscient]

I've already looked into these companies, it's coming where you'll borrow from your BTC as collateral and never actually sell your BTC.

Bitcoin will be real wealth going forward.

[Braco22]

I am just unsure, is your Bitcoin the ONLY collateral? Or you have to collateralize the home as well?

[Dirty]

I am just unsure, is your Bitcoin the ONLY collateral? Or you have to collateralize the home as well?

I assume that will be the end goal eventually, But I have not yet looked at any of these companies to say so. Probably will have to put up other collateral or be ready to throw a pile of money at it if BTC crashes while this loan is going on?

[Braco22]

I assume that will be the end goal eventually, But I have not yet looked at any of these companies to say so. Probably will have to put up other collateral or be ready to throw a pile of money at it if BTC crashes while this loan is going on?

They'll eventually ask you to over-collateralize the loan if it's BTC only, like 160% of the home's worth, or combine the home + BTC. Either way, you don't sell your BTC so it's a VERY GOOD news in terms of adoption in the housing market.

[Omniscient]

They'll eventually ask you to over-collateralize the loan if it's BTC only, like 160% of the home's worth, or combine the home + BTC. Either way, you don't sell your BTC so it's a VERY GOOD news in terms of adoption in the housing market.

From my understanding you get about 50% of your BTC deposit towards a loan.

For example, you give them 1 BTC and that's held as about $50k in collateral. When you pay off the loan, you get the 1 BTC back.

For a mortgage though not yet sure.

I have gathered a list of Crypto-backed loan sites.

https://app.morpho.org/borrow?network=mainnet
https://unchained.com/
https://www.coinbase.com/loans
https://sovryn.com/zero
https://saltlending.com/
https://rocko.co
https://www.milo.io/rates/refinance-a-home/

I have not used any of these. But I watch the market just in case.

The SaltLending to me seems one of the better ones. You get 70% LTV (Loan to value) and rates are as low as 9%.

Technically someone could have 1 BTC, get a loan $70k at 9%, then buy .7 BTC with it. Then do that again with another company.

AI Quote: Absolutely, let’s run through it again with 1 BTC = \$108,000 as the starting price.

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Step 1: Initial Setup

1 BTC = \$108,000
70% LTV loan:
\$108,000 × 0.70 = \$75,600 Buy more BTC with loan:
\$75,600 / \$108,000 = 0.7 BTC
Total BTC controlled:
1 BTC (collateral) + 0.7 BTC (bought) = 1.7 BTC

---

Step 2: After 3 Years (BTC = \$250,000)

Total BTC held: 1.7
Value:
1.7 × \$250,000 = \$425,000

---

Step 3: Loan Repayment After 3 Years

Principal: \$75,600

APR: 9% (compounded yearly)
Amount Owed:
\$75,600 × (1.09)^3 ≈ \$75,600 × 1.295 = \$97,902

In BTC at \$250,000:
\$97,902 / \$250,000 = 0.3916 BTC needed to repay

---

Step 4: BTC Remaining After Repayment

Initial total: 1.7 BTC

After repaying loan:
1.7 BTC - 0.3916 BTC = 1.3084 BTC
Value in USD:
1.3084 × \$250,000 = \$327,100

---

Step 5: Compare to HODL

If you just held 1 BTC:
1 BTC × \$250,000 = \$250,000

---

Step 6: Gain from Leverage

Leverage scenario: \$327,100

HODL scenario: \$250,000
Extra gain: \$327,100 - \$250,000 = \$77,100

Return on your original \$108,000:
(\$327,100 - \$108,000) / \$108,000 ≈ 202.87% gain

---

Summary Table

| Scenario | End BTC | End USD value | After loan payoff | Net USD value |
| -------- | ------- | ------------- | ----------------- | ------------- |
| HODL | 1 | \$250,000 | N/A | \$250,000 |
| Leverage | 1.7 | \$425,000 | Pay back \$97,902 | \$327,100 |

---

Bottom Line:

Leverage turns 1 BTC into 1.3084 BTC after all is paid back, if BTC moons from \$108k to \$250k in 3 years at 9% APR.
Your USD gain from leverage is \$77,100 higher than just HODLing.
* But: If BTC crashes or is flat, your downside risk is bigger, and you risk liquidation.

Want to see this with different LTV or APR? Or a price that doesn’t double?

[Braco22]

Yeah, a lot of DeFi chains have borrowing against BTC in form of wBTC and I think they give you around 75% and liquidation call is at 80%. The interest rate is I think variable and when the market is not booming like crazy it hovers around 5-7%.

I am currently actively borrowing on Binance for the past 3 years, and as soon as we see an explosion in the market the borrow interest rates tend to shoot up to 50-60% per year. When the market is sideways or in a down turn, since let's say end of December the rates have been around 4.5 - 6.5%. The only downturn is that the interest rate is paid hourly, and is compounding hourly as well. But Binance let's you have 78% initial LTV while the liquidation LTV is at 91%.