Using Cryptocurrency to Buy a Home in Canada: What You Need to Know

Image courtesy of Canadian Mortgage Trends

As someone who works closely with homebuyers and navigates the mortgage world daily, I often get asked: “Can I use cryptocurrency to buy a home in Canada?”

With Bitcoin, Ethereum, and other digital assets becoming household names, it’s natural that Canadians want to leverage their crypto wealth toward homeownership. The good news is yes, it’s possible—but it’s not as straightforward as handing over cash. Here’s what I want you to know about turning your digital assets into a mortgage or down payment.

Crypto Mortgages: Two Main Paths

There are two ways cryptocurrency can factor into your home purchase:

• Crypto-funded mortgage

  • You sell your cryptocurrency, convert it to Canadian dollars, and use the cash for your down payment.

  • This is the more common scenario but comes with tax consequences since disposing of crypto triggers capital gains tax.

• Crypto-backed mortgage

  • You use your crypto as collateral without selling it, which might help you avoid capital gains taxes.

  • However, fewer lenders are equipped to handle this, and it requires platforms comfortable managing crypto risk.

What Does This Look Like in Practice?

Let me share a couple of real client experiences:

One client converted their crypto to Canadian dollars, letting the funds sit in their bank account for over 90 days—a “seasoning” period that most lenders require to verify funds. Despite the funds being in fiat, many banks declined to approve the mortgage since crypto-related transactions are still viewed skeptically. Thankfully, Bank of Montreal’s specialized underwriting team understood the crypto source, performed the necessary anti-money laundering checks, and approved the mortgage.

In another case, clients relying heavily on a crypto-down payment had their mortgage approval withdrawn days before closing by a traditional bank. To save the deal, we secured a private mortgage through a lender specializing in crypto clients, allowing them to keep their $250,000 deposit and close on their home. Even refinancing later proved challenging as banks continued scrutinizing their crypto origins.

Using Crypto-Collateralized Loans to Access Cash

If you want access to funds without selling your crypto, crypto-backed loans are an option. Here’s how they work:

• You deposit your crypto as collateral on platforms like Ledn or YouHodler.

• You can borrow between 30% to 70% of your crypto’s value.

• You receive the loan in Canadian dollars or stablecoins without a credit check.

• You repay on a fixed or flexible schedule, and your crypto is returned.

• If your crypto’s value falls too much, you may need to add collateral or risk liquidation.

• Since you’re borrowing, not selling, no capital gains tax is triggered—potentially a tax-smart move.

A Safer, More Traditional Alternative: Crypto ETFs

For Canadians looking for exposure to digital assets with fewer complexities, crypto Exchange Traded Funds (ETFs) can be a great option. Held through regular brokerages—even in registered accounts—they’re easier for lenders to verify compared to direct crypto wallets. ETFs such as Purpose Bitcoin ETF (BTCC) or Fidelity Advantage Bitcoin ETF (FBTC) give you cryptocurrency exposure while smoothing the mortgage documentation process.

Important Considerations Before Using Crypto in Your Home Purchase

• You must convert crypto to Canadian dollars for the down payment and keep a clear, documented trail for lenders.

• Anti-money laundering (AML) compliance is strict, so lenders need to verify funds’ origins.

• Not all lenders accept crypto-related funds—working with a mortgage professional who understands crypto is key.

• Regulatory rules, including tax and financial compliance, are evolving, with new standards expected soon.

• Price volatility and platform risks mean crypto-backed loans carry risks like margin calls or liquidation.

• Unlike bank deposits, crypto collateral isn’t insured by Canadian deposit insurance programs.

If you’re holding cryptocurrency and dreaming of homeownership in Canada, planning is everything. I’m here to help guide you through this complex but exciting process. Reach out to me, Mr. Mortgage (Kechanth Kannan), so we can chart your unique path to buying a home with digital assets.

📞 +1 (647) 554-2718

📸 Instagram: @_mrmortgage

Together, we’ll turn your crypto wealth into real-world homeownership—with confidence and clarity.