Australia's Block Earner launches first Bitcoin-backed mortgage: priced in BTC, housing prices are getting cheaper.

Under the pressure of high housing prices and the rise of encryption assets, Australian startup Block Earner has launched the nation's first "Bitcoin mortgage" scheme, allowing coin holders to acquire real estate without needing to sell their assets, and redefining the assessment methods of assets and credit. This not only creates new ways of engaging with mortgages and finance but also reveals the potential trend of the integration between the housing market and digital assets.

Paying the house down payment with Bitcoin, you can easily move in without selling coins.

Due to the sharp rise in housing prices in Australia, a local startup named Block Earner is launching Bitcoin-backed loans, providing cryptocurrency holders with a new way to enter the real estate market without having to sell their assets.

Through this new product, users can pledge their Bitcoin and have it custody at the third-party digital asset platform Fireblocks, and in return, borrow cash equivalent to up to 50% of the house price from Block Earner as a down payment, while the remaining mortgage portion will still be handled by traditional financial institutions.

Block Earner offers lending services for up to four years, during which only monthly interest payments are required. Repayment can be made in cash or cryptocurrency, and early settlement is also possible. The remaining mortgage portion is still undertaken by traditional financial institutions.

( Can encrypted assets be loaned? JPMorgan plans to open up cryptocurrencies as ETF lending collateral )

What to do about price fluctuations? Block Earner has set up three safety locks.

In the face of the severe fluctuations in Bitcoin prices, Block Earner has also established a three-tier protection mechanism to reduce liquidation risks:

Loan-to-value ratio (LVR) must be lower than 60%: The loan amount cannot exceed 60% of the market value of the collateralized Bitcoin.

30-day grace period mechanism: If the Bitcoin price drops and causes the LVR to exceed the limit, borrowers have 30 days to correct the ratio by supplementing with cash or BTC.

Partial liquidation: If the margin is not restored by the due date, the platform will only sell a portion of BTC to maintain a 60% ratio, and the property itself will not be affected.

The design avoids the common risk of full liquidation in encryption lending agreements and allows users to further participate in the real estate market while continuously holding Bitcoin exposure.

From the perspective of Bitcoin: Housing prices are getting cheaper year by year.

Block Earner co-founder James Coombes pointed out that the traditional financial system equates good credit with having a stable salary, cash deposits, or retirement funds, but this assessment standard overlooks the potential wealth of cryptocurrency holders:

They have long been prepared, just not seen by traditional finance, and this mortgage product will be the key to transforming dormant assets into real liquidity.

In fact, when priced in Bitcoin, Australian housing prices have actually been declining. Block Earner pointed out: "The average housing price was 627 BTC in 2016, and only 4.3 BTC remains in 2024."

In other words, when fiat currency continues to inflate and housing prices rise year by year, Bitcoin accumulates purchasing power for its holders, making this service more persuasive.

The US is here too? FHFA explores encryption mortgage loans.

Not only Australia, but the United States has also begun to take action recently. In June of this year, William Pulte, the director of the Federal Housing Finance Agency (FHFA), requested that the mortgage agencies Fannie Mae and Freddie Mac explore whether "encrypted assets in custodial exchanges" can be included in the standards for assessing mortgage assets.

In addition, the U.S. House of Representatives has recently introduced a bill that would require mortgage institutions to recognize the value of encryption assets when calculating credit risk, and there is no need to convert them into U.S. dollars, indicating that traditional finance is gradually acknowledging the credit value of encryption assets.

(Big Short? The Federal Housing Finance Agency in the United States has classified cryptocurrency as a risky collateral for mortgages )

Alternative solutions under runaway housing prices, why should encryption assets be included?

Australia and the United States are both facing a serious housing crisis, with the median house price in Sydney being 14 times the annual household income, while in the United States it has reached 7 times the annual household income. As it becomes increasingly difficult for ordinary people to accumulate a down payment through salary, a population with a large amount of encryption assets but insufficient cash has also become a new blue ocean in the mortgage market.

In this context, Bitcoin mortgage not only represents a product innovation but may also be a turning point in the system. When the financial system begins to acknowledge the value and liquidity of encryption currencies, it also signifies that digital assets are entering the realm of the real economy.

This article discusses Australia's Block Earner launching the first Bitcoin-backed mortgage: priced in BTC, housing prices are becoming cheaper. The news first appeared on Chain News ABMedia.