Can I Use Cryptocurrency as a Mortgage Deposit?

The rise of cryptocurrency and digital assets has been hard to miss in recent years. Many people are investing their time and money into cryptocurrencies (or crypto) like Bitcoin and Ethereum with the aim of building their financial stability.

But can you get a mortgage with cryptocurrency?

As cryptocurrency has shifted from an exciting innovation to a mainstay financial asset, many are left wondering if they can start using Bitcoin for a mortgage deposit or if other cryptocurrencies are a viable way to secure a mortgage.

In this article, we explore everything you need to know about securing a mortgage with cryptocurrency. From how UK lenders view crypto assets and what evidence is required, to the best ways to prepare your mortgage application. Let’s begin.

How Do Mortgage Lenders Treat Cryptocurrency Deposits?

In the UK, lenders are generally cautious when it comes to accepting cryptocurrency and crypto assets to support a mortgage loan. As the relationship between cryptocurrency and mortgages continues to evolve, lenders are becoming more open to accepting crypto-derived funds for deposits, but they typically require the assets to be converted into pounds and supported by thorough documentation.

The main concern for lenders is that digital currency is often volatile and difficult to trace. However, by providing clear documentation of conversions from crypto to fiat currency, it is possible to meet lenders’ requirements.

Ultimately, lenders need to ensure that the funds used or declared on your mortgage application are legally obtained, traceable, and stable. As such, for lenders to even consider cryptocurrency in your mortgage application, you will need to be able to:

• Provide clear proof of the origin of your crypto, including full wallet transaction history and exchange activity.
• Documented evidence that the crypto was legally acquired and fully converted into GBP.
• Demonstrate stable, long-term holdings – lenders often prefer this over short-term speculative trades as it indicates a more secure financial position.

In short: If you’re planning to submit a deposit that is made up of assets cashed out from a crypto wallet, you’ll need to ensure that you can demonstrate a consistent history of those holdings. Any attempt to use untracked peer-to-peer transfers will almost certainly be rejected.

What Proof Do I Need to Use Cryptocurrency for a Mortgage Deposit?

When applying for a mortgage with cryptocurrency, proving the legitimacy and source of your deposit is key. In the UK, cryptocurrency is not legal tender. As such, lenders will require any cryptocurrency to be transferred into GBP.

To ensure financial protection, lenders will also focus on anti-money laundering (AML) compliance. As a result, all supporting documents that prove the legitimacy of your currency will need to be thorough, clear, and consistent. Here’s what most lenders will typically ask for:

• Wallet transaction history that shows how and when you acquired the crypto.
• Exchange records confirming the sale or conversion of the cryptocurrency into GBP.
• Bank statements showing the funds arriving in your UK account.
• Tax documentation to confirm compliance with HMRC and the appropriate declaration of gains, including declaring cryptocurrency gains for mortgage affordability assessments.

Here we have provided a quick overview of the most common documentation that lenders will expect to see:

When it comes to cryptocurrency and lenders – it’s all about evidence. Lenders will have strict strict guidelines, and even small gaps in your financial trail can lead to unnecessary delays or rejections. As such, without this level of documentation, it can be difficult for lenders to approve your cryptocurrency mortgage deposit.

At Boon Brokers, our dedicated mortgage experts have a wealth of experience dealing with the complexities of cryptocurrency and mortgages. With whole-of-market access, we can help match your unique situation to lenders who are open to crypto deposits – securing you the best mortgage deal that aligns with your needs.

Can I Pay a House Deposit Directly in Cryptocurrency?

No, you cannot pay mortgage deposits directly in cryptocurrency. In the UK, cryptocurrency is not legal tender. As such, mortgage lenders, solicitors, and estate agents will almost exclusively deal in GBP.

While the idea of sending your earned Bitcoin straight to a lender’s or estate agent’s wallet might sound simple, the reality is that the financial market operates within a strict regulatory framework designed to minimise financial crime. Unfortunately, because cryptocurrency users often remain anonymous, it is very difficult for lenders to trace transactions, which raises red flags for compliance.

Even in the scenario that both buyer and seller agree to a crypto transaction, it remains highly unlikely that any UK lender or solicitor would participate or approve the deal. Simply, mortgages that are funded by crypto must go through a full conversion into legal tender, AML checks, and documented transactions.

Do All UK Lenders Accept Cryptocurrency as a Deposit Source?

No, most UK lenders do not accept cryptocurrency directly as a deposit source. The majority of high street banks are still cautious about crypto, with many choosing to reject it entirely due to risk and regulation concerns.

As we’ve already touched on, lenders are cautious due to the risks and complexities of verifying crypto funds, as well as the volatility of cryptocurrency values; the value of cryptocurrency can change quickly and drastically. It’s important for lenders to see a clear, traceable path of the money – from pounds to crypto and back again – before agreeing to a mortgage offer.

The table below outlines the key requirements and explains why each is important in the approval process.

An increasing number of leading high-street lenders, such as Halifax and Barclays, are now open to mortgage applications backed by cryptocurrency, while specialist lenders often offer more flexible criteria.

If you plan to use cryptocurrency as part of your deposit, speaking to a trusted mortgage broker early can help you save both time and money. At Boon Brokers, our dedicated experts can help guide you through crypto-funded mortgage applications, completely fee-free. We will match you with lenders who are open to this type of deposit and help you to avoid any unnecessary delays.

Is Crypto Volatility a Problem for Mortgage Applications?

Yes, the high volatile nature of cryptocurrency is one of the biggest problems in mortgage applications. As a digital asset that can fluctuate drastically in value overnight, crypto is still considered an unreliable source or proof of income by most lenders.

When completing a crypto mortgage application, lenders will require you to convert crypto to GBP well in advance of your mortgage application.

Additionally, it’s best to keep your funds in one place. Frequent transfers between wallets or exchanges might appear suspicious to lenders and trigger extra checks, slowing down your application and eligibility.

How Should I Prepare If I Plan to Use Crypto for a Mortgage?

Lenders will expect a clear financial trail and evidence of stable funds. And so, if you’re planning to use digital assets to fund a mortgage, preparation is everything.

Your strategy to provide evidence needs to be proactive. Here are 4 key steps that can help you secure a mortgage with cryptocurrency:

1. Sell Your Crypto and Convert to GBP Early

Lenders won’t accept cryptocurrency directly. You’ll need to convert your crypto into legal tender (GBP) well before applying.

While you may have the urge to wait and hope your pot increases, converting your cryptocurrency into a more stable legal tender early will protect you from market volatility and allow your funds to settle in a bank account, demonstrating to lenders that you have the financial stability to secure a mortgage.

2. Keep Detailed Records of Every Transaction

To pass anti-money laundering checks, you’ll need a clear audit trail. This includes your wallet history, exchange records, and bank transfers.

Having all the right documents and being transparent about your trading will help build more confidence with your chosen lender, demonstrating that you have a safe, legal, and reliable source of finance for your mortgage deposit.

3. Gather Your Crypto Tax Documentation

HMRC expects capital gains on crypto to be declared. Some lenders may ask for your self-assessment return (SA100) to confirm that the crypto was legally acquired and declared.

Understanding your crypto capital gains tax UK obligations and having the right documentation ready can show compliance and credibility, helping quicken the application process.

4. Work With a Mortgage Broker Experienced in Crypto Cases

Working with a whole-of-market broker – like Boon Brokers – who understands cryptocurrency and mortgages can save you a lot of time and stress. At Boon Brokers, we know which lenders are more crypto-friendly and can help you avoid delays caused by misunderstandings or incomplete paperwork – completely fee-free.

Do Mortgage Brokers Work With Crypto Income or Assets?

Yes. A regulated mortgage brokers with experience of dealing with cryptocurrency will be able to help greatly improve your chances of mortgage approval with digital assets

It’s important to find a broker who understands how crypto assets for mortgage approval are treated by lenders, how best to present them, and which lenders are most likely to accept them.

At Boon Brokers, our expert advisers have experience navigating the complexities of cryptocurrency mortgage applications. We can help package all of your mortgage information in a way that maximises your credibility with lenders. Utilising our whole-of-market access, we will also know which lenders are open to crypto sources and what compliance steps are required.

Find a Mortgage Broker That Can Help You Use Cryptocurrency

Using cryptocurrency in your mortgage application can be complex, but with the right advice and approach – you can ensure that your crypto finance helps boost your mortgage goals.

While many lenders in the UK are cautious, there are some who will be open to deposits sourced from crypto, as long as your documentation is complete and your funds are properly converted into pounds.

At Boon Brokers, we’re a fee-free, whole-of-market mortgage brokerage with experience in helping clients utilise unusual deposit sources, including cryptocurrency, to support their mortgage deals.

Our dedicated team of mortgage advisers will provide you with expert guidance, taking you  through every step of your cryptocurrency mortgage application. We’re here to help you compare lenders, find the best mortgage deal, and prepare your paperwork to improve your chances of approval – all without charging a fee.

Are you ready to start your mortgage journey?

Contact Boon Brokers today and arrange a free, no-obligation consultation to start your mortgage journey and switch from crypto to keys.