Decentralized mortgage lender Salary Protocol has minted its first seven mortgages every bit nonfungible tokens, or NFTs, offering investors and borrowers new options for accessing the residential mortgage market place.

The interest rate for each NFT mortgage ranges from 1.5% to 3.one% on backdrop in four U.S. states, the company disclosed Wednesday. That's the interest rate borrowers pay after minting their mortgage through Salary Protocol. By comparison, the boilerplate mortgage charge per unit in the Usa ranged from 2.27% to two.98% for the calendar week ending Nov. 10, co-ordinate to Freddie Mac. The xxx-twelvemonth fixed-rate mortgage peaked at 3.14% on Oct. 28.

Mortgage rates in the United States have ticked up recently but remain well below the historic average. Source: Freddie Mac

Bacon'south decentralized mortgage platform, which launched in September, gives homeowners the power to exchange a lien on their property for an NFT that represents a portion of its value. In May of this twelvemonth, blockchain startup Propy became the first visitor to launch a real estate NFT, offering a tangible use case for smart contracts in the residential housing market. Whereas Propy auctioned a physical apartment as an NFT, Bacon Protocol is minting mortgages that finance residential properties.

Bacon Protocol NFTs are based on smart loans that are developed by platform originator LoanSnap, which uses artificial intelligence to determine mortgage eligibility. "The NFTs work by wrapping the lien on the abode, while the protocol then lends against the NFT," Bacon Protocol explained. Once a mortgage NFT is minted, it's sent to the homeowner who then makes payments straight to Salary Protocol.

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More than than a decade removed from the 2008 fiscal crunch, which was punctuated by the subprime mortgage meltdown, the residential mortgage marketplace appears ripe for disruption. In addition to giving homeowners the power to substitution a lien on their property for an NFT at lower interest rates, Bacon Protocol intends to make investments in the market place easier through its bHome token, which is backed past USD Coin, liens and loans on U.Due south. properties.

Bacon Protocol co-founder Karl Jacob said "the mortgage industry is not meant to exist replaced, just built upon with new applied science," adding that "NFTs and smart contracts fit perfectly into the lending globe as they are like to many legal arrangements in real estate, with upgraded technology and features."