Bitcoin-Backed Mortgages Let Lenders Redeploy Pledged Crypto

Better Mortgage, working with Coinbase, offers mortgages that use bitcoin as collateral. The terms that have drawn attention concern what happens to the pledged bitcoin after the loan is issued.

Collateral is not locked away

• Better Mortgage has the ability to reuse or redeploy the bitcoin put up by borrowers.
• Borrowers cannot recover their cryptocurrency until the main conventional mortgage is fully paid off or refinanced.
• This structure differs from a typical custodial loan, where collateral is usually held without being used by the lender.

The program appears to be aimed at homeowners who want to unlock bitcoin value without selling it, while still obtaining a standard mortgage. Details on how the lender's reuse of collateral is governed or insured were not fully elaborated in the initial announcement.