Guide to Cryptocurrency Mortgage UK

Guide to Cryptocurrency Mortgage UK

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An editor at Coincrop

29 Aug 2022 | 16 min read


he fast-growing crypto space made many millionaires and even billionaires. But the profits have no value without a real-world application. And real estate companies grabbed the opportunity to enable crypto-based mortgages, especially in the US.

One of the leading financial power, the UK, is also looking forward to the adaption. Cryptocurrency mortgage UK managed to become popular prior to its launch. And you should know whether you can take advantage of the digital transaction.

Disclaimer: All of the information written on Coincrop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.

What is Cryptocurrency Mortgage UK?

A crypto mortgage is none other than a digitized version of a traditional home loan. The loan agreement between a lender and a borrower takes crypto as collateral. Likewise, the borrower has to pay certain interest for the loan specified by the lender.

Cryptocurrency mortgage UK refers to the facilitation of loaning within the greater UK. Mortgages based on cryptos can provide additional benefits and flexibility to the borrower. And the lenders give loans as per the borrower’s digital asset portfolio.

However, mortgages using crypto are more popular and widespread in the US. Multiple lenders are active across the country to lend cryptocurrency as collateral. But only one company, Coadjute, is now operating for cryptocurrency mortgage UK.

Several plans by different real estate companies are underway across the UK for crypto lending. There’re concerning rules and regulations for crypto applications. And traditional mortgage providers aren’t very fond of cryptos for high market volatility.

Coadjute Cryptocurrency Mortgage UK

    • Coadjute simply means co-operate. It’s a real-time blockchain real estate network connecting the property market. The proptech company is legally registered in England and Wales.

    • The company features networking software for anyone related to the real estate business. It includes – agents, brokers, surveyors, lenders, conveyancers, and other parties in a property transaction.

    • Its peer-to-peer (P2P) software allows data synchronization, document sharing, instant access to Land Registry, and more. So, all the involved parties can track the entire transaction live.

    • Their services are currently limited within the UK, relying on supported fiat currencies. However, the planned cryptocurrency mortgage UK will likely help the transaction process further.

How Does Crypto Mortgage UK Work?

Coadjute partnered with the global technology firm R3 for the cryptocurrency mortgage UK. They will launch a mortgage stablecoin in the blockchain network. The issued crypto asset is the 1st UK retail bank-compatible digital asset.

Due to the recent crypto decline, the proposed plan for 2021 is yet to become available for public use. However, the intended stablecoin is the first of its kind worldwide. Coadjute hopes to boost the completion of UK mortgages with its launch.

The UK has been at the forefront of improving cryptocurrency since the beginning. Also, UK’s high-priced property transactions observed almost no digitization in 20 years. So, the lending service designed by Coadjute will likely revolutionize the sector.

Its purpose-built stablecoins will introduce efficient fund transformation to agreeing parties. It counts mortgage lenders, conveyancers, and estate agents. The low-cost process will also eventually cut out the risk of scams and fraud.

All the relevant funds are currently locked in local bank accounts. And R3 will enable the banks to issue the mortgage stablecoins on the network’s blockchain ledger. All parties can request, track, and exchange stablecoins with the software.

Coadjute designed the system to provide a “single source of truth” to its customers. The simultaneous and instant service will skip the manual reconciliation process. A programmed transaction will remain ready to get completed in a specified time.

The digitized process will also benefit the banks issuing stablecoins to some extent. It’ll give the banks a heads-up on their current liquidity positions. Also, the involved financial institutions can deliver forecasts on the mortgage flow.

Cryptocurrency Mortgage UK Brokers

Not many people can figure out ways to handle any potential setbacks. Also, agents or lenders involved in the transaction may skip certain user benefits.

That’s where an experienced broker can help you find and fix the right deal. They’re experts in minimizing the risks while getting you the maximum advantages.

Brokers expert on cryptocurrency mortgage UK within the country is scarce. The practice of using crypto is yet to gain momentum among potential borrowers.

However, you can still consult mortgage brokers who specialize in crypto collateral. Letting the experts solve the mortgage issues can come up with good openings.

Also, you can hire brokers to understand the crypto mortgage option details. They can provide detailed insight into property transactions anywhere at any time.

Benefits of Cryptocurrency Mortgage UK

Cryptocurrency Mortgage UK

Benefits like less cost, instant access, and no manual processing are already mentioned. Still, there are particular advantages to enjoy on a large-scale consideration. Take a look at the potential positives of switching to cryptocurrency mortgage UK.

    • No Collateral Selling

There’s no need to sell your crypto assets to keep them as collateral for your mortgage. Paying the loan with interest will get you the collateral back. It skips the point of keeping any valuable/sensitive items as collateral to buy a house.

    • Increase in Value

Surges in market pricing can push the current cryptocurrency mortgage UK value. An increase in price means greater advantages in property valuation. You can receive additional profits based on the lender service’s mortgage policy.

    • No Involvement of Tax

The process doesn’t require any cash-out of the cryptos for converting to fiat currency. Digital assets as collateral can significantly reduce tax liability. The point is more evident with a substantial amount of cryptocurrency holding. 

    • Lending Recourses

The lending party doesn’t have to opt for foreclosure upon due payment. Instead, the services recourse to cover up the expense and damages. However, foreclosure or recourse completely depends on the company’s mortgage policy.

    • No Credit Checking

Cryptocurrency mortgage UK won’t look into your credit history before lending money. So, you can save worrying about subpar or high-risk credit factors. Also, you can evaluate more mortgage options than the traditional process.

    • More Crypto Benefits

Using crypto as collateral for mortgages is more like staking your digital assets. And this advantage can help you reduce your current debt obligations. It can deduct the overall amount you owe to the lending party throughout the period.

Cryptocurrency mortgage UK can save time, effort, and money on property transactions. Anyone facing difficulty in having a mortgage through the traditional channel can try cryptos. This way barely concerns your real-world income or expense. 

Risks of Cryptocurrency Mortgage UK

    • Margin Calls

A significant drop in the chosen cryptocurrency price will set the collateral price low. And the lender will need you to add to the existing collateral. This additional locking of crypto to deal with the declining value is called margin calls.

    • Liquidation Risk

Also, you can avoid margin calls by repaying the loan within an accelerated time frame. Drastic drops in prices can affect cryptocurrency mortgage UK severely. However, you can tackle the high volatility by choosing stablecoins instead of altcoins.

    • Zero Control

Using cryptos as collateral means strict locking of the assets until full repayment of loans. So, you can no longer access the assets for even checking. Anyone relying on crypto income should consider the possible jump in prices.

The highly volatile defi market is difficult to predict, even for experts. And the prices can drop beyond your pre-assessed estimation to cause havoc. So, make sure you can handle the problems associated with sudden decline or spark.

Wrapping Up

Cryptocurrency Mortgage UK

The concept of cryptocurrency mortgage UK is getting developed in full swing. However, the plan keeps experiencing back-to-back setbacks for various reasons.

Experts still stand for traditional property transactions within your stats. Anyone who can’t afford a mortgage in that channel should try the virtual collateral first.

It’s crucial for anyone looking into its facility to understand the market. Hiring a broker can relieve you of potential failure, uncertainty, and fluctuations. 

Cryptocurrency Mortgage UK FAQs

Mortgage deposits, payments, and pay-offs are available within specified limits. The lending process is complex based on the lending company’s policy. Unfortunately, no lender is available anywhere worldwide to provide full crypto mortgages.

Declaring crypto business as the source of income is yet to become available. Cryptocurrency mortgage UK has no plan to recognize digital finance as a source. However, the trend is likely to change in other countries with enormous markets.

Choosing crypto for a mortgage primarily depends on the lender’s perspective. Bitcoin and Ethereum are becoming adopted by leading real estate companies across the US. Also, some companies permit stablecoins like USDT or USDC for mortgages.

You can lock the available crypto assets as collateral to apply for a mortgage. The agreement will likely make you pay off the mortgage using specified crypto. However, full-scale cryptocurrency mortgage UK is unlikely to get available anytime soon.

Banks are still trying to regulate the extracted money from the virtual world. They can face difficulty in channeling the money from the crypto business. That’s why some retail banks in the UK refused to give mortgages on crypto-derived funds.



An editor at Coincrop
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Chris is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely assembling lego models.

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