Australia’s First Crypto-Backed Mortgage Lets Borrowers Use Bitcoin to Secure Up to Half Property Value — But Is It Too Risky?

Bitcoin as Security for Home Loans Changes the Australian Property Game

Australia’s housing market, long known for its steep prices, has seen a new player enter the scene—Bitcoin-backed mortgages.

Sydney fintech firm Block Earner has launched the country’s first home loan that lets borrowers use Bitcoin as collateral, sidestepping the need to sell their crypto assets.

This move follows a Federal Court ruling in April 2025 that cleared the company from requiring a financial services licence, opening the door for crypto-backed lending to become part of mainstream finance.

How Bitcoin Collateral Opens New Paths for Homebuyers

Block Earner’s loan product allows homebuyers to pledge their Bitcoin holdings as security for a mortgage, with the crypto assets held safely by Fireblocks, a regulated custody platform.

Borrowers can secure cash loans covering up to 50% of the property’s value while maintaining ownership of their Bitcoin.

This approach gives crypto investors a chance to tap into Australia’s housing market without triggering capital gains taxes or losing exposure to future price increases.

Borrowers face risks too.

If Bitcoin’s value falls sharply, they may be required to add more crypto or risk having their collateral liquidated.

Block Earner aims to monitor prices continuously and alert borrowers to avoid surprises.

Interest rates start at 9.5% annually for loans at 40% loan-to-value, with comparison rates reaching 11.9% at 80% LVR.

A Regulatory Battle That Shaped the Market

This product only became possible after Block Earner won a two-year legal battle with the Australian Securities and Investments Commission (ASIC).

Initially, ASIC claimed the crypto lending products resembled investment products requiring a licence.

However, the Full Federal Court overturned this view in April, ruling that these loans did not meet the legal definition of “financial products” under the Corporations Act.

The ruling freed Block Earner from the regulatory constraints that had previously held back crypto lending innovation in Australia.

Charlie Karaboga, Block Earner’s CEO, said:

“Crypto holders shouldn’t have to choose between holding Bitcoin and buying a home. We’re giving them a smarter option, a way to put their crypto to work without giving it up.”

Bitcoin Makes Homeownership More Accessible in a Challenging Market

Australia’s property affordability crisis is well documented, with average home prices approaching ten times the typical household income.

In Sydney, this ratio climbs even higher, at nearly 14 times the median income—second only to Hong Kong globally.

For many, especially younger Australians who have accumulated wealth in Bitcoin, traditional lending requirements have kept homeownership out of reach.

Using Bitcoin as collateral offers an alternative to salary and savings-based credit assessments, potentially broadening access to property finance.

Block Earner points out that while an average Australian home cost 627 Bitcoin in 2016, by 2024 that figure had dropped dramatically to just 4.3 BTC, highlighting how property prices have declined relative to Bitcoin’s rise.

The US Joins the Race to Integrate Crypto with Home Loans

Australia is not alone in exploring crypto-backed mortgages.

In the US, regulators and lawmakers are moving to include cryptocurrency holdings in mortgage assessments.

On 25 June 2025, FHFA Director William Pulte instructed Fannie Mae and Freddie Mac to investigate recognising crypto assets held on regulated exchanges as part of borrowers’ reserves.

Further, a bill introduced to the US House of Representatives aims to require mortgage agencies to update their guidelines to consider cryptocurrency holdings without forcing borrowers to convert to cash.

If passed, this legislation could expand home loan eligibility for crypto investors in the US.

Will Crypto-Backed Lending Change How We Buy Homes?

While the housing affordability crises persist in Australia and the US, Bitcoin’s strong performance over the last year—with an 87% increase—offers crypto holders new opportunities to leverage their assets.

Block Earner’s initiative signals a shift in how digital assets can interact with traditional finance sectors, potentially opening new doors for homebuyers and investors alike.

With over $110 million in mortgage demand recorded during its soft launch, Block Earner’s model is already gaining traction.

As other countries watch closely, crypto-backed loans could soon become a familiar option for those seeking to bridge the gap between volatile digital wealth and the stability of property ownership.