Company claims that this is the first ever bitcoin-backed mortgage product in Canada
Toronto-based fintech Ledn, which offers bitcoin-backed loans to crypto-friendly investors, said that it will begin offering bitcoin-backed mortgages.
The announcement came in the wake of the fintech’s successful round of funding, which raised $70 million in capital. This round pushed Ledn’s valuation to roughly $540 million, the company said.
Ledn said that part of the funds will go towards supporting the bitcoin-backed mortgages, with bitcoin holders to be allowed to borrow up to 100% of the cryptocurrency’s ongoing market value.
Mauricio Di Bartolomeo, co-founder and chief strategy officer of Ledn, told The Globe and Mail that this offering is the first ever bitcoin-backed mortgage in Canada.
“The idea for a bitcoin mortgage came from existing clients we had who were using our bitcoin-backed loans. They were crypto investors who had a large amount of bitcoin holdings and wanted to leverage it without having to sell their bitcoin,” Di Bartolomeo said.
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Ledn said that for prospective home purchases valued at least $1 million, a borrower can get up to $800,000, or 50% of the combined value of the bitcoin and the residential asset.
“We only advance 50 per cent of the value of the collateral, to hedge against the volatility of bitcoin,” Di Bartolomeo said.
The company has yet to confirm the interest rate on these mortgages, although the exact rate will likely be lower than the 9.5% interest rate of Ledn’s bitcoin-backed loan product.
Ledn said that it is expecting strong and sustained demand to push its mortgage originations to around $100 million by the end of Q1 2022.
