Crypto Mortgage vs. Traditional Mortgage: What's Actually Different

The median age of a first-time homebuyer in the United States just hit 40, according to the National Association of Realtors. Affordability has tightened, rates have climbed, and the traditional path to homeownership has grown longer and harder for a lot of people.

At the same time, a growing segment of potential buyers has built real wealth outside the conventional system. Forty-five percent of Gen Z and Millennial investors own crypto. Many of them have the assets to buy a home. What they often don't have is a financial profile that fits the standard mortgage mold.

That's where the crypto mortgage comes in. Unfortunately, most buyers still don't know exactly how a crypto mortgage works, or how it compares to a traditional loan.

Here's a clear side-by-side breakdown of the two approaches.

---

What Is a Crypto Mortgage?

A crypto mortgage is a home loan that incorporates your cryptocurrency holdings into the financing structure. The two most common models are:

Collateral-based: You pledge Bitcoin or another eligible cryptocurrency as collateral. The lender uses the value of that collateral to secure your loan. You keep ownership of your crypto; it just serves as security for the debt.

Asset-based underwriting: The lender evaluates your crypto holdings as part of your overall financial picture, even if the crypto isn't directly pledged as collateral. This approach applies when a borrower doesn't have traditional income documentation but has substantial crypto assets.

Milo operates with both models. Your Bitcoin stays invested. You borrow against its value rather than selling it, which means no forced liquidation and no capital gains tax event.

A traditional mortgage, by contrast, requires a down payment in cash, income documentation (typically W-2s or tax returns), and underwriting based on your debt-to-income ratio. Your assets matter, but only as verification of reserves, not as the primary basis for approval.

---

How Underwriting Works

This is where the two products differ most fundamentally.

Traditional mortgage underwriting follows guidelines set by Fannie Mae, Freddie Mac, or the FHA. Lenders look at:

• Credit score (typically 620+ for conventional loans, 580+ for FHA)
• Debt-to-income ratio (usually capped at 43-50%)
• Employment history (two years in the same field is a common benchmark)
• Down payment (3-20% of the purchase price in verified cash)

If your income is irregular, if you're self-employed, or if most of your wealth is in digital assets, this process can screen you out before it ever gets to your actual financial strength.

Crypto mortgage underwriting looks at different inputs. Milo evaluates the value of your crypto collateral relative to the loan amount, the stability and liquidity of the cryptocurrency pledged, and your overall financial profile. There is no W-2 requirement. The collateral is the foundation.

The product launched in 2026 by Better and Coinbase takes a hybrid approach: it's a standard conforming mortgage paired with a separate crypto-backed loan for the down payment. Borrowers must qualify for the traditional portion of the mortgage in order to use this product.

Milo's structure is different. The loan itself is a crypto mortgage, not a traditional conforming loan with a crypto-funded down payment layered on top.

---

Collateral Requirements

With a traditional mortgage, the collateral is the home itself. If you stop making payments, the lender can foreclose. Your personal assets, including crypto, are generally not part of the collateral picture.

With a crypto mortgage, your Bitcoin or other eligible crypto serves as additional collateral. Milo lends up to 100% loan-to-value on crypto collateral. That means if you pledge $1.5 million in Bitcoin, you can access up to $1.5 million in borrowing capacity from that collateral pool.

This collateral position puts you in a strong setup if crypto markets move. If BTC drops significantly, this structure protects both you and Milo. In a margin maintenance scenario, you may need to top up your collateral or make a partial paydown. This is a real consideration that traditional mortgages don't have, and one worth understanding before you commit.

The upside: if BTC appreciates during your loan term, your position improves. You kept the upside while still accessing the home financing you needed.

---

Interest Rates

Traditional mortgage rates as of early 2026 sit around 6%-7% for a 30-year fixed loan, depending on your credit profile and down payment size.

Crypto mortgages typically price higher. Most crypto-backed home loan products run 0.5 to 1.5 percentage points above comparable conventional loans. The spread reflects the additional risk the lender takes on by accepting a volatile asset as collateral as well as the higher loan-to-value.

That's a real cost. On a $750,000 loan, a 1-point rate premium adds roughly $450 per month compared to a conventional loan at the same term. Whether that tradeoff makes sense depends on your specific situation.

For buyers who would face a capital gains tax bill from selling appreciated Bitcoin, or who simply don't want to exit a position they believe in, the rate premium is worth it. For buyers who have conventional income and could qualify traditionally, the traditional mortgage often wins on cost. You can use our mortgage comparison tool to run the numbers.

Milo is transparent about this tradeoff. We're not trying to replace the traditional mortgage for everyone. We're a better option for buyers who the traditional system can't serve.

---

Closing Timelines

Traditional mortgage timelines typically run 30 to 60 days from application to close. Delays are common: documentation requests, appraisal holdups, and underwriting queues can stretch the process.

Crypto mortgages with Milo close in as few as 15 days. The process is streamlined because underwriting is built around a different set of inputs. There's less back-and-forth on income documentation because the collateral does more of the work.

In competitive markets, this matters. Sellers have choices. A buyer who can commit to a 27-day close is a different conversation than a buyer whose timeline is 45 to 60 days and contingent on documentation that hasn't been gathered yet.

---

Who Each Option Is Right For

A traditional mortgage makes sense if:

• You have W-2 income and two years of consistent employment history
• Your down payment is in cash and you're comfortable parting with it
• You don't hold significant crypto assets, or you're willing to sell and pay the tax bill
• You qualify for a competitive conventional rate and want the lowest long-term cost

A crypto mortgage makes sense if:

• Most of your wealth is in Bitcoin or other crypto assets
• You don't want to sell your position and trigger a taxable event
• You're self-employed or have income that doesn't fit the standard documentation model
• You want a faster closing and a streamlined process built for your situation

These aren't mutually exclusive categories. Some buyers explore both paths and make a decision based on their actual numbers. The right answer depends on your tax situation, your timeline, and how you feel about your crypto position.

---

A Word on the Fannie Mae Development

The March 2026 Fannie Mae announcement is significant because it signals institutional recognition that crypto assets have a place in home financing. But it's worth reading carefully: the Better/Coinbase product is a conforming loan with a crypto-backed down payment loan stacked on top.

That structure works for some buyers. For others, especially those who want a simpler product that treats crypto as the primary collateral rather than a down payment workaround, Milo's approach is more direct.

We've closed $100 million in crypto mortgages since 2022. That's real volume, real borrowers, and real homes. The product isn't theoretical.

---

Ready to Explore Your Options?

If you're a crypto holder exploring what a mortgage could look like for your situation, start with the numbers. Get a clear picture of what your collateral position looks like, what rate you'd qualify for, and how that compares to your conventional options.

You can get started at milo.io. The process is straightforward, and the estimate is free.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.