The rise of cryptocurrency in recent years has led to an increasingly common question: Can you use Bitcoin, Ethereum, and other cryptocurrencies as a deposit for a mortgage? This guide explains everything you need to know about using cryptocurrency as a deposit for a mortgage.

Can I use cryptocurrency as a deposit source for a mortgage?

In short, yes, with certain lenders. Mortgage lenders and solicitors want to be able to verify not only the deposit itself but also the origin and source of funds. Given the anonymous nature of cryptocurrency, this can be challenging, and because the market is unregulated, most lenders do not consider it a valid source for a deposit. Those that do will require the funds to be converted to sterling or fiat and transferred to a regular account rather than paid as cryptocurrency.

Which lenders accept crypto deposits for a mortgage?

Because cryptocurrency is a relatively new phenomenon and not regulated, there are not many lenders that accept it as a deposit for a mortgage. However, a few notable mainstream lenders, such as Barclays, Bluestone, and Tandem, do consider it. As the cryptocurrency market evolves, more lenders may become more lenient towards this source of deposit.

What if you withdraw funds from crypto?

The source of funds will still need to be evidenced even if you place them into a regular sterling account. However, if they have been in sterling for a prolonged period of time, lenders and solicitors may consider the funds ‘aged’ and classify them as savings rather than crypto. This will vary among lenders and solicitors, but the period is typically from 3 to 12 months. 

Can you use Crypto to pay your mortgage?

While you cannot use crypto directly to pay your mortgage, which is usually required to be paid via direct debit from a UK-based sterling account, you can convert your profits to sterling to make the payments.

Can I use cryptocurrency for mortgage affordability? 

Due to the volatility and anonymity of the markets, it is currently not possible to use this as a source of income to generate mortgage borrowing. Whether this changes in the future remains to be seen.

What is the process to secure a cryptocurrency mortgage? 

  • 1. Consult a Specialty Cryptocurrency Mortgage Broker: Book an appointment with a mortgage broker who specialises in cryptocurrency. They can help you understand your options and guide you through the process.
  • 2. Gather Documentation and Evidence of Funds: Collect all necessary documents to prove the origin and amount of your funds and deposit. This includes transaction histories, bank statements, and any other relevant financial records.
  • 3. Secure an Agreement in Principle (AIP) Obtain an Agreement in Principle from a lender. This indicates that the lender is willing to lend you a certain amount based on your financial situation.
  • 4. Search for a Property Begin your property search once you have your AIP. This gives you a clear understanding of your budget and borrowing capacity.
  • 5. Apply for a Mortgage Submit your full mortgage application with all required documentation. The lender will review your application, verify your funds, and proceed with the approval process.

How can Strive help

At Strive, we can guide you through the complexities of using cryptocurrency for a mortgage deposit. Our team has extensive experience with cryptocurrency transactions and can provide expert advice on leveraging your digital assets. We work with lenders who accept cryptocurrency and help you gather the necessary documentation and evidence of funds.

FAQ’S

  • Who are crypto-friendly mortgage lenders? Some notable mainstream lenders that consider cryptocurrency as a deposit include Barclays, Bluestone, and Tandem.
  • Can I use Bitcoin as a deposit for a mortgage?: Yes, with certain lenders, you can use Bitcoin as a deposit for a mortgage. However, the funds must be converted to sterling or fiat currency and transferred to a regular account.
  • Can I use Ethereum as a deposit for a mortgage? Yes, you can use Ethereum as a deposit for a mortgage with certain lenders. As with Bitcoin, the funds must be converted to sterling or fiat currency and transferred to a regular account.
  • How much deposit do I need for a cryptocurrency mortgage? The minimum deposit typically required is 5%, but this depends on affordability and the lender’s criteria.

Can you use cryptocurrency to buy a house? Yes, you can use cryptocurrency to buy a house, but the process involves converting your cryptocurrency to a fiat currency like sterling and providing evidence of the source and origin of the funds. The acceptance of cryptocurrency for property purchases is subject to the policies of the involved parties, including lenders, solicitors, and the seller.

Contact us todayand we’ll work hard on your behalf to find you a competitive mortgage.

For more information on mortgages for contractors, please contact a member of the Strive team, by emailing [email protected] or call us on 01273 002697.