Bitcoin-Backed Mortgages Reach Canada, but Borrowers May Overlook the Risks

Canadian lender APX Lending plans to introduce Bitcoin-backed mortgages in early 2027, allowing homebuyers to use their BTC holdings to finance property purchases without selling their cryptocurrency. Borrowers could pledge Bitcoin to cover a down payment or potentially fund the entire purchase, although the company has not yet revealed mortgage rates or specific lending conditions.

The Toronto-based lender opened a waitlist on Wednesday and expects to launch the product in the first quarter of 2027. APX, which already offers cryptocurrency-backed loans, says it aims to become Canada’s first regulated provider of Bitcoin-backed mortgages.

Last month, APX announced five-year lines of credit backed by Bitcoin and Ethereum. Its proposed mortgage product would extend crypto-backed lending into Canada’s housing market, where outstanding mortgage debt reached $1.75 trillion in June, according to the Canada Mortgage and Housing Corporation.

Similar financing options have gained traction in the United States. Miami-based lender Milo reported in February that it had issued more than $100 million in crypto-backed mortgages, including a single loan worth $12 million. Its products allow borrowers to secure mortgages using Bitcoin or Ether, with repayment periods of up to 30 years.

APX founder and CEO Andrei Poliakov told CoinDesk that Canada’s market for Bitcoin-backed real estate financing could be worth between $60 million and $100 million. He also said that real estate already accounts for 15.8% of the company’s existing crypto-backed lending volume.

For a property valued at approximately $650,000, Poliakov said a buyer could obtain $95,000 to cover a 20% down payment by pledging $190,000 worth of Bitcoin. Someone seeking to finance the entire purchase without contributing a cash down payment would need to pledge approximately $465,000 in Bitcoin, with the property itself also serving as collateral.

Mortgage Rates and Lending Conditions Remain Unclear

APX has yet to publish its proposed mortgage interest rates, repayment schedules, loan-to-value limits, or the circumstances under which borrowers might face margin calls or liquidation of their collateral.

The company’s existing crypto-backed loans carry annual interest rates ranging from 9.99% to 11.49%, with borrowing calculations based on a 60% loan-to-value ratio. However, these conditions may not apply to the planned mortgage product.

Poliakov said that including the property as additional collateral could help reduce borrowing costs, but he did not disclose an expected interest rate.

Bitcoin’s price volatility remains a significant concern for prospective borrowers. A sharp decline in BTC’s value could require borrowers to provide additional collateral or risk having some of their pledged cryptocurrency sold, depending on the terms of their agreements.

Poliakov explained that a 40% decline in Bitcoin’s price would increase the loan-to-value ratio of a standalone loan that began at 50% to approximately 83%. However, he said loans secured by both Bitcoin and real estate would be evaluated under a different framework.

Bitcoin Liquidation Risks Could Affect Mortgage Borrowers

APX said it uses BitGo to safeguard customers’ cryptocurrency and does not lend out the pledged assets. Its existing lending system also includes automated liquidation mechanisms that sell a portion of Bitcoin collateral when the loan-to-value ratio reaches 90%, bringing the ratio back down to 85%.

The planned mortgage product will have separate rules governing collateral, defaults, notice periods, and opportunities for borrowers to address collateral shortfalls, according to Poliakov.

He emphasized that selling pledged Bitcoin and enforcing a mortgage against a property are separate processes. Whether a decline in collateral value could ultimately put a borrower’s home at risk would depend on the specific loan agreement.

“Canadians shouldn’t have to choose between owning Bitcoin and owning a home,” Poliakov said.

For now, interested buyers can register through APX’s waitlist. The company has not provided a specific date for publishing the mortgage terms, but Poliakov said the details would be disclosed before the planned launch in early 2027.

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