APX founder and CEO Andrei Poliakov told CoinDesk he estimates the Canadian market for bitcoin-backed real estate financing at $44 million to $73 million. He said 15.8% of the company’s existing crypto-backed loan volume is already tied to real estate.
For a home costing about $475,000, Poliakov said a buyer could borrow $95,000 for a 20% down payment by pledging $190,000 in bitcoin. Buyers seeking to finance the entire purchase without a cash down payment would need to pledge about $475,000 in bitcoin, with the property also serving as collateral.
APX has not disclosed its mortgage interest rates, repayment periods, loan-to-value limits or the conditions under which borrowers could face margin calls or collateral liquidation.
Its existing crypto-backed loans carry annual rates of 9.99% to 11.49%, with borrowing estimates based on a 60% loan-to-value ratio. Those terms do not necessarily apply to the planned mortgages. Poliakov said using the property as additional collateral could lower borrowing costs, but declined to provide an expected mortgage rate.
Bitcoin’s volatility presents another risk. A sharp price decline could leave borrowers needing to provide more collateral or facing the sale of pledged bitcoin, depending on the mortgage terms.
Poliakov said a 40% drop in bitcoin’s price would push a standalone loan starting at 50% loan-to-value to about 83%. He said a mortgage secured by both bitcoin and the property would be assessed differently.
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