Until recently, the idea of taking out a mortgage backed by cryptocurrency sounded more like a blockchain enthusiast’s fantasy than a serious financial product. But by 2025, crypto mortgages have begun transforming from a niche curiosity into a legitimate segment of the lending market — one that may soon gain formal recognition in the U.S.
What Is a Crypto Mortgage?
A crypto mortgage is a home loan that incorporates digital assets and Web3 technologies at one or more stages of the process.
The concept of crypto-backed mortgages emerged at the intersection of decentralized finance (DeFi) and traditional finance (TradFi): blockchain automates and ensures transparency, while the underlying loan remains secured by real estate, just like a conventional mortgage.
Key differences from traditional mortgages include:
- Digital assets like Bitcoin can be used as collateral.
- Repayments are often made in stablecoins.
- Creditworthiness is assessed using on-chain data, bypassing traditional credit scores.
- Smart contracts replace paper agreements, allowing for programmable terms.
- Intermediaries such as banks, notaries, and escrow agents are minimized, often replaced by DeFi infrastructure.
While full legal automation is not yet feasible, blockchain already enables streamlined processes such as identity verification, risk assessment, payments, penalties, and automated property transfer based on loan performance.
In practice, most offerings are still hybrid: platforms may rely on licensed custodians to hold collateral, work with mortgage servicers, use fintech tools to handle fiat exchanges and comply with regulatory reporting requirements.
Unique Features of Crypto Mortgages
The key features of crypto mortgage lending are closely tied to the broader dynamics of the cryptocurrency market and the specifics of integrating Web3 solutions into traditional sectors. For example:
- Borrowers often receive funds in fiat or stablecoins, not crypto, due to limited real-world crypto payment adoption.
- Repayment terms vary; some loans are denominated in fiat, others in crypto, exposing borrowers to market risks similar to leveraged positions.
- Overcollateralization is standard, helping offset crypto price volatility.
Platforms like Spectral Finance assess borrower risk using blockchain data — no FICO score is required.
Some providers offer adaptive loan-to-value (LTV) ratios. For example, the Figure adjusts collateral requirements based on market movements: borrowers must top up if prices fall, and get refunds when they rise.
Others, like Ledn, combine Bitcoin and real estate as dual collateral to enhance loan stability.
Emerging models also include DSCR-based lending, where projected rental income is the key underwriting metric. Milo, for example, offers investment mortgages that evaluate property income potential instead of borrower income.
Crypto Mortgages in Practice
Crypto mortgages come in three core formats:
- Centralized lenders — crypto banks and fintech firms operating under financial licenses.
- Decentralized platforms — blockchain-native lending pools and protocols.
- Hybrid models — combining elements of both.
An analysis of real-world cases will help illustrate the key features of each model.
Centralized Providers
Notable examples include:
- Milo (U.S.): The first U.S.-based crypto mortgage provider. Offers 30-year loans up to $5 million, with 4–6% annual interest. Accepts BTC, ETH, and stablecoins as collateral, and covers up to 100% of home value without a down payment. As of March 2025, Milo had issued over $65 million in crypto mortgages and more than $250 million in total residential loans.
- Figure (U.S.): Offers crypto loans up to $20 million with ~6% interest and up to 100% LTV, using its Provenance blockchain to tokenize mortgages and manage a digital lien registry.
Other players include Ledn (Cayman Islands), YouHodler (Cyprus), and Nexo (Switzerland) — all of which offer mortgage products as part of broader crypto lending services.
Decentralized Platforms
One of the first decentralized crypto mortgage deals in the U.S. took place in October 2022. A single-family home in South Carolina, tokenized as an NFT via Roofstock onChain, was purchased using USDC through the USDC Homes pool on the Teller Protocol.
The buyer contributed 20% in equity, while the rest was funded by the DeFi lending pool. The transaction, including escrow and repayments, occurred fully on-chain using Polygon. Ownership was represented as an NFT tied to a limited liability company (LLC), held in a smart contract until full repayment.
Hybrid Model
The African project Empowa exemplifies a hybrid approach. It issues NFTs on the Cardano blockchain, each representing a fractional investment in affordable housing in Mozambique. Funds are directed to local developers like Casa Real to build energy-efficient homes starting at $10,000.
Completed homes are leased to low-income families under rent-to-own terms. Monthly payments of $30–$60 over 10–15 years are recorded on-chain, helping build digital credit histories. NFT holders receive returns from rental income, with expected yields of 8–10% annually, blending real estate, social impact, and crypto finance.
Crypto Mortgage Market: What’s Next?
The U.S. remains the dominant crypto mortgage market, with products available to both domestic and international crypto asset holders. Early-stage efforts are also underway in Switzerland, Portugal, the UAE, and Saudi Arabia — though regulatory frameworks are still developing.
Global institutional interest is rising. Major investment funds have begun backing crypto mortgage platforms, while fintechs and Web3 startups are scaling their offerings. Builders, brokers, and real estate agents are also paying attention — especially as real-world use cases gain traction.
In one such case, Centrifuge, in partnership with mortgage lenders New Silver and MakerDAO, tokenized a U.S. mortgage portfolio as NFTs. The loans were pooled, tranched, and used as collateral to mint DAI stablecoins. By late 2022, this decentralized financing model had attracted over $30 million in capital — becoming the first large-scale instance of DeFi underwriting traditional home loans.
Real estate tokenization is also expanding, creating a new class of digital assets suitable for collateral and securitization. Meanwhile, rising interest rates and stricter bank lending have made crypto mortgages a viable alternative — especially for crypto-native borrowers who lack conventional credit credentials.
As tokenized real estate and DeFi infrastructure mature and legal frameworks solidify, crypto mortgage volumes are expected to grow, bridging digital finance and the real-world economy.
