For the first time in Australia, cryptocurrency holders can use their Bitcoin as collateral to secure a home loan. Block Earner, a local fintech company, has won a long-standing legal battle that will see it offer the country’s first Bitcoin-backed mortgage.
This move marks a significant shift in how Australians can approach homeownership, especially as housing affordability continues to be a growing issue.
Block Earner’s decision to launch a Bitcoin-backed home loan product comes after a protracted fight with corporate regulators. The company successfully argued in court that it didn’t need a financial services licence to offer its products, paving the way for the launch of the first crypto-backed mortgage in the country.
The introduction of this new loan type means that cryptocurrency investors no longer need to sell their assets to enter the property market. Instead, they can leverage their Bitcoin holdings as collateral for a mortgage.
A New Path to Homeownership for Crypto Investors
Traditionally, property buyers have been limited to selling their assets or saving over time to make a home purchase. However, according to Block Earner, Bitcoin has now become a legitimate asset class that can help ease Australia’s ongoing housing crisis.
The company believes that Bitcoin, alongside other inflation-resistant assets like gold, could offer a solution to the affordability gap that’s widening due to rising housing prices and stagnant wage growth.
Block Earner’s CEO and co-founder, Charlie Karaboga, explained that Bitcoin holders should no longer have to choose between holding their digital assets and buying a home.
“We’re giving them a smarter option, a way to put their crypto to work without giving it up,” he said. Block Earner aims to create an inclusive, asset-backed pathway to homeownership, ensuring that cryptocurrency investors can remain in the property market without the need to liquidate their holdings.
Terms and Flexibility of the Loan Product
The loan offers flexibility for cryptocurrency holders who want to use their assets to secure a property. Customers can pay interest-only for up to four years, either in crypto or Australian dollars, depending on their preference. The loan is expected to be approved within 24 hours, with no lock-in or early repayment fees.
Interest rates for these Bitcoin-backed loans begin at 9.50% per annum with a loan-to-value ratio (LVR) of 40%, with comparison rates of 11.93% at an 80% LVR.
The loan structure offers both fixed and variable options, providing potential borrowers with flexibility in managing repayments. Block Earner has already seen significant demand for its product, with over $110 million in mortgage inquiries during its soft launch.
This new approach to financing could alter the landscape for property buyers in Australia, offering an innovative way to access home loans while retaining their cryptocurrency assets.
