The Bitcoin mortgage fixed interest rate of Coinbase could put a healthy collateral at risk after the maturity date.

What is this product?

Coinbase launched a secured loan service as Bitcoin using USDC with fixed interest rates and maturity dates from the beginning, announced in conjunction with Morpho on September 22, 2026. The system behind it is the Morpho Midnight Fixed Rate Loan Protocol.

Before confirming the Coinbase loan, an approximate interest rate is displayed and then a final rate is set at confirmation. The prepayment does not reduce the interest payable. This product sits next to the original floating-rate loans of Coinbase that never reach maturity.

Why is this important?

A point that many people overlook is that fixed-rate loans have a "double trigger condition". The first one is well known: if the price of Bitcoin drops or debt increases to an excess LTV ratio, Morpho's system allows you to settle your account before its due date.

The second is Morpho's post-maturity rule. If the debt has not been paid by the due date, then the liquidator can pay off that debt and take over the collateral -- even if the borrower's position is healthy, the LTV is safe, at the exact time of maturity, a strong position hasn't yet been settled through this pathway, but it's already established; the collar stays in the system until someone calls for business.

Another point to know: the borrower. I can't. The original loan can be swapped between a fixed rate and a floating rate, so the maturity date and total repayment are conditions that must be carefully checked before being confirmed.

What kind of effect does that have on the user?

Coinbase is open to customers in the United States who have already verified their identity (except New York) and limited opening in the UK. The Morpho collateral page lists it as Bitcoin for this fixed-rate launch, whereas Coinbase states that the underwriting options may vary between fixed rate and floating rates loans.

The system sends three maturity alerts: 7 days, 3 days and 24 hours before the due date. But even with a warning and LTV safe, lenders have to make full payments on time because sufficient collateral doesn't stop other events that can cause accounts to be debited after the due period.

For users familiar with crypto-secured lending, remember that a fixed rate provides better cost forecasts but comes with a "deadline" that changes when the collateral becomes risky as opposed to a floating rate loan which never matures.

Reference data from CryptoSlate.