Do banks consider your Bitcoin holdings when you apply for a loan?

A physical Bitcoin 'coin'

Cryptocurrencies like Bitcoin have seen major mainstream interest over the past few years.

With so many people including various cryptocurrencies in their investment portfolios, some amassing significant wealth, you might be wondering if your crypto holdings carry any clout when it comes to impressing the loan manager at the bank.

What is cryptocurrency?

Cryptocurrency is one type of crypto-asset, a cousin of Non-fungible Tokens (NFTs), and distantly related to Security and Utility tokens. Essentially, it’s digital money which usually isn’t backed by physical assets (like gold, for instance). 

There are many reasons why cryptocurrency is so alluring, not least is the fact that its value can skyrocket, leading to quick (although risky) profit-making practices through trading. This is because its value is based on how much people are willing to actually pay for it - otherwise known as speculation. 

Cryptocurrency is also usually decentralised, and purportedly boasts increased digital security through its use of blockchain technology and encryption. 

While Bitcoin is touted as the first cryptocurrency to hit digital wallets in 2009, the market is hitting its ‘troubled teen’ years. Only instead of mood swings, you’ve got spectacular highs and crashing lows, leaving most people plainly confused by its behaviour.

So, will your crypto holdings factor into your lender’s loan decision?

In short, unfortunately not. This is partly because of the generally volatile nature of the cryptocurrency market.

A classic example being thrown about is that someone influential, like Elon Musk, could make a tweet which causes the price of Bitcoin to cliff-dive, devaluing your financial position drastically. That isn’t good news for you or the bank. 

If your current financial position is based on your crypto holdings, which can go up and down like a pogo stick, then your position is technically less concrete. That’s why banks won’t factor in your Bitcoin or other crypto when calculating their loan risk. 

What banks and lenders really want to see is consistency of earnings and a proven track-record of repayments, among other things that increase your borrowing power

Banks also won’t factor in your crypto-folio because these online coins aren’t considered a valid form of Australian currency, which is their bread and butter.

Can I use Bitcoin (or cryptocurrency) for a deposit or home loan repayment?

By cashing in on your cryptocurrency holdings you can use your Australian dollars for loan repayments or even a deposit. 

If you’re considering buying a property, make sure you understand the home loan process, including what information and evidence you’ll need to have ready. After that, compare home loan options to find the best deal for you.

Compare home loans - last updated 13 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% p.a.

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

    Details
  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

    Details
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.

    Details