The Financial Times reported on 22 on a homebuyer who took out a $130,000 Bitcoin-backed loan alongside a conventional mortgage, pledging $325,000 worth of Bitcoin — 2.5 times the amount borrowed.

The essentials up front: the collateral ratio is $2.50 Bitcoin for every $1 lent; pledged Bitcoin can be liquidated after 60 days of missed payments; pre-applications have reached $360 million in requested loans; and a $130,000 loan at 7.40% runs to roughly $900 a month.

Two Loans at Closing, One Number in the Pitch

Better and Coinbase announced the product in March and made it generally available in August, billing it as the first token-backed conforming mortgage — crypto collateral paired with a Fannie Mae-standard home loan, and a structure the companies position as expanding homeownership access for a new generation of borrowers. Better later told CoinDesk that pre-applications had reached $360 million in requested loan volume, above the $260 million it had projected from its waitlist. The disclosed figures cover requested volume, not funded loans; how many of those pre-applications reach closing is the next datapoint to watch.

Borrowers actually receive two loans at closing. The first is a conforming Fannie Mae mortgage on the home. The second funds the cash down payment and is secured by the pledged Bitcoin plus a second lien on the property. Better originates both, in 15- or 30-year fixed terms, and the pledged Bitcoin does not help a borrower qualify for the main mortgage.

Better's product page frames the decision as selling versus pledging. Its default example produces an “Est. net benefit” of $46,000 upfront — mostly the cash a buyer no longer has to put down. What the comparison leaves out is everything after closing day.

What It Costs to Keep $130,000 in Bitcoin

The FT borrower pledged $325,000 of Bitcoin, but that is not the amount of exposure the loan preserved. His alternative was to sell roughly $130,000 worth — plus any tax owed — and keep the rest. The second loan pays for continued exposure to that $130,000 slice, while the entire $325,000 stays locked.

The down-payment loan, on its own:

• Borrowed: $130,000
• Monthly payment: about $900
• Interest over 30 years: about $194,000

The figures are illustrative: 360 payments at 7.40%, Freddie Mac's 30-year average as of October 15. Better's actual pricing depends on underwriting. The math excludes the main mortgage, fees, property tax and insurance, and assumes no early repayment.

At that weekly average of 7.40%, the borrower is paying about $900 a month to hold on to $130,000 of Bitcoin. The pledge works out only if that slice gains more than the interest and fees, after tax. The payments are fixed; the gains are not.

Day 60 for the Bitcoin, Day 180 for the House

Better says a falling Bitcoin price never triggers a top-up or a forced sale. Its FAQ contrasts this with margin loans, where collateral can be liquidated automatically at a set loan-to-value ratio even when payments are current.

The delinquency timeline runs as follows:

• Day 1: Delinquency begins the day after a missed payment.
• Day 30: Deadline to bring the account current.
• Day 60: Better may liquidate the pledged Bitcoin.
• Day 180: Foreclosure proceedings on the home can begin.

That protection covers price, not income. A household hit by falling crypto prices and a lost job escapes the margin call, but it still has to make the payment that keeps the Bitcoin from being sold at day 60. And because the down-payment loan also carries a second lien, the house secures it as well.

Locked Until the Mortgage Is Gone — and Possibly Reused

Better's FAQ offers three different answers on when the Bitcoin comes back. One says it is returned once the down-payment loan is repaid. Another says it comes back only after the main mortgage is fully repaid or refinanced. A third says it is released when the home is sold and the down-payment loan is paid off. Better told CoinDesk that the collateral stays locked until the conventional mortgage is repaid or refinanced — which, on a 30-year loan, can mean decades.

The coins may not sit untouched in the meantime. Better told CoinDesk it may rehypothecate pledged Bitcoin, putting it to work elsewhere, as long as an equivalent amount is available to return at payoff. The borrower is owed the same quantity of Bitcoin, not necessarily the same coins, and depends on Better being able to deliver. Coinbase acts only as custodian and technology provider, with no role in extending credit or deciding on liquidation, the companies told CoinDesk.

The Tax Case — and the Test That Matters

Avoiding a sale can avoid a tax bill. The IRS treats digital assets as property, so selling can realize a capital gain. Better's example applies a flat 20% rate, but federal long-term rates run 0%, 15% or 20% depending on income, short-term gains are taxed as ordinary income, and the outcome also depends on the holder's cost basis. Better itself tells borrowers to consult a tax adviser.

The deciding question is cash flow. The pledged Bitcoin cannot be used to make payments while it is locked, so the borrower's income has to cover both loans for as long as they run.

This article is for informational purposes only and does not constitute financial, legal, or tax advice. Loan terms and eligibility vary; calculations are illustrative.