Pre-paid cryptocurrency cards, merchants accepting Bitcoin, and governments coming up with plans on issuing their own digital assets promise a bright future for the crypto space development. The ultimate goal of companies building crypto-powered infrastructure is to make the use of digital assets easy and convenient. And although we’ve made quite good progress already, some things still stay off-limit.
Simple financial operations like buying a house or getting a loan are a no-brainer for fiat holders. But if you want to use Bitcoin to pay a mortgage, this might seem like an impossible task. However, if you set your mind to something and if you’ve only got cryptocurrency to cover your down payment, there are a few options to do so.
But first, let’s look into the obstacles that might come along the way when paying off your mortgage with cryptocurrency.
Should I Pay for Mortgage With Bitcoin?
One of the main problems that you might come across when taking out a house loan in BTC is volatility. Depending on the current state of the market, it can be a good or a bad thing. Cryptocurrency rates don’t just slightly fluctuate, there’s always the risk that the price might drop big time. Or it can also skyrocket. And if the last one is the good news as you can quickly sell your Bitcoin to pay off the mortgage and profit from a good deal, drastic price drops can be quite unsettling. Especially when you’ve got a payment to make.
Whatever you decided to do with your money, it’s always worth playing it safe. Don’t put all the eggs in one basket – diversify your portfolio. Invest in anything that you feel more comfortable such as different crypto coins, stocks, fiat currencies, gold, or real estate. If one asset is not doing that great, you might get a profit off another one. One of the solutions to paying your mortgage in crypto is to invest mindfully and then trade your digital assets. This means waiting for the right timing then exchange it to fiat, and then using it to pay for your down payment.
But there’s one thing to keep in mind. Nobody likes paying taxes, we get it. But when you make a big purchase such as a house you probably want your tax history to be impeccable. Whether you’re trading or investing in crypto, always mention your profits in the tax declaration. It will spare you from the possible problems with the IRS and, frankly speaking, it just the right thing to do.
Now, getting back to the bitcoin mortgage issue. If the scenario when you’re exchanging your crypto to fiat can actually work, imagine using BTC to value a mortgage. After you set a fixed exchange rate with the company the price of Bitcoin suddenly goes up you would end up owning your bank more. On the other hand, if the price drops, you’ll have to pay less. But what are the odds that banks would tolerate such a deal?
However, paying a mortgage with Bitcoin is technically not really an option.
How to Pay My Mortgage With Bitcoin?
More and more companies are starting to do accept crypto payments, and mortgage sphere is getting interested as well. According to U.Today, Matrix Mortgage Global, a leading mortgage brokerage firm in Canada, has started to accept Bitcoin and other cryptocurrencies.
Some Bitcoin payment processors in exchange for a small fee allowed providing your mortgage information and set up monthly payments or process them manually. Then the service will connect with your creditors and makes a payment based on the current exchange rate.
With the extensive development of the DeFi space, it won’t be a surprise if we will soon see some actual offers on bitcoin mortgages. At the moment many platforms offer taking out a crypto-collateralized loan and this market keeps on growing. It is fair to assume that it is only a matter of time before we see some movements in the cryptocurrency mortgage direction.
The Bottom Line
So the question “Can I pay my mortgage with Bitcoin?” has an answer, and it’s “yes”, for example, in Toronto.
In the future when blockchain tech gets a little more advanced and financial institutions become more cooperative buying a house with Bitcoin or other crypto will become a common practice. Even now we can see positive steps in this direction. For instance, a Canadian mortgage, personal loan, and investment services firm has recently announced it will launch a Bitcoin cashback campaign for people using their Visa Platinum Prepaid Card to get or refinance their mortgage.
Also, we might see DeFi projects stepping up their game and offering house loans in exchange for crypto. At the moment, one of the available solutions is to exchange your cryptocurrency for fiat and pay off your loan the old-school way. Just make sure to diversify your portfolio and pay taxes in time.