Mortgages in the metaverse

Purchasing physical property or land can be a costly and time-consuming process —and it's not just on this planet either, as you can discover in our mortgages on the moon guide —but how would bagging a mortgage in the metaverse work?
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Editor’s note: this guide is for informational and entertainment purposes only, money.co.uk would not recommend investing in a property on the metaverse or buying cryptocurrency of any sort without fully understanding all the risks to your real-world  money. Cryptocurrencies are highly volatile and unregulated in the UK. Your capital is at risk and lack of consumer protection means that it is likely you may get back less than you originally invested.

First coined by author Neal Stephenson in his 1992 novel, Snow Crash, the term ‘metaverse’ has become more prevalent in recent years. For those who are unfamiliar with the term, the metaverse is essentially a simulated 3D digital world where users can interact via virtual reality headsets. This includes the opportunity to purchase virtual property, with metaverse mortgages now available to help users buy digital homes and land.

Alternatively, if you are looking for your next physical home on earth, we can help you compare mortgages to find the right deal for you.

Metaverse properties are usually purchased with cryptocurrency, ownership is transferred through non-fungible tokens (NFTs) and stored in a crypto wallet. This digital currency has seen its popularity rise in recent years. In fact, as the number of global crypto users surpassed 300 million at the close of 2021, the first ever metaverse mortgages were signed in early 2022.

With ‘virtual’ and ‘actual’ real estate prices soaring, just what does the future of this technology look like? 

If you’ve ever wondered how much a mortgage in the metaverse could set you back, we’ve done the maths and delved deep into the world of virtual properties.

How do mortgages in the metaverse work?

Mortgages in the metaverse - image module

[NFT news today

In the real world, a mortgage constitutes a financial contract between a borrower and a lender on a property or area of land. As part of this agreement, the borrower must make regular repayments to clear the balance on the loan and complete the purchase. If the borrower fails to meet their repayments, the lender can subsequently claim ownership of the property or land. Metaverse mortgages work in much the same way.

A metaverse mortgage helps users to buy a virtual property, which is usually purchased with cryptocurrency—Ethereum and SAND are two of the most popular choices. As with a standard mortgage, you’ll need to repay the loan, plus interest, over an agreed time period. If you fail to make your repayments, the lender can seize your virtual property and sell it to recoup their losses.

Editor’s note: this guide is for informational and entertainment purposes only, money.co.uk would not recommend investing in a property on the metaverse or buying cryptocurrency of any sort without fully understanding all the risks to your real-world  money.

The cost of living in the metaverse

Just like in physical reality, the cost of living in the metaverse can vary greatly depending on the plot of digital land you buy and the size of the virtual property you build. Fortunately, there are many ways that buyers can offset their costs. From becoming a metaverse landlord to building billboards and constructing interactive venues, property owners can generate income through rent and admission charges.

When it comes to the ‘literal’ building, using an architect isn’t a requirement for virtual property. However, hiring a designer can help to bring your metaverse vision to life. Again, prices vary depending on the size and scale of your project. However, as of June 2022, there were over 100 individuals listed as ‘metaverse architect’ onFiverr, with prices starting from £4.27 and others surpassing £7,000.

RANKCOLLECTIONDEPOSITLOAN AMOUNTMONTHLY MORTGAGE COST
1Hampton Hall£2,380,407£21,423,663£199,244
2Sandbox£351,315£3,161,837£29,406
3Decentraland£196,999£1,772,993£16,489
4Otherside£51,901£467,105£4,344
5Axie Infinity£45,672£411,052£3,823
6Mars House - Krista Kim£23,916£215,242£2,002
7Arcade Land (Mega)£8,221£73,989£688
8Worldwide Webb Land (Penthouse)£7,216£64,946£604
9Republic Realm - Fantasy Island£7,208£64,872£603
10NFT Worlds£5,398£48,579£452
11Sandbox£2,696£24,260£226
12WorldWide Webb Land (large apartment)£814£7,324£68
13Arcade Land (X-Large)£746£6,711£62
14WorldWide Webb Land (Medium Apartment)£413£3,714£35
15WorldWide Webb Land (Small Apartment)£349£3,139£29
16Arcade Land (Large)£332£2,989£28
17Arcade Land (Standard)£303£2,728£25

Most expensive mortgages in the metaverse

Editor’s note: this guide is for informational and entertainment purposes only, money.co.uk would not recommend investing in a property on the metaverse or buying cryptocurrency of any sort without fully understanding all the risks to your real-world  money.

We've found the five most expensive virtual properties for sale in June 2022. From the most luxurious metaverse mansions to A-list celebrity neighbours, the metaverse is home to some seriously ‘desirable’ real estate.

Fake cities graphic

For those looking to own a mansion in real life and the meta world, there’s Hampton Hall. Listed for sale in February 2022 for a cool £29 million, you could own this real-world Surrey mansion on the metaverse with monthly mortgage repayments of £199,244.

Alternatively, you can spend big bucks to live near a celebrity. This includes the ‘Snoopverse’, a metaverse built by Snoop Dogg in the Sandbox platform,which made headlines when an individual spent £340,500 to become Snoop’s neighbour. If you’d like to invest in virtual property in Sandbox, we’ve calculated that the average monthly mortgage would cost you £29,406.

If you’re searching for something a little more ‘affordable’, you could secure a metaverse mortgage in Decentralised for £16,489 per month. Alternatively, the average mortgage in Otherside will cost you £4,344 per month, compared to £3,823 for Axie Infinity.

Most affordable mortgages in the metaverse

Editor’s note: this guide is for informational and educational purposes only, money.co.uk would not recommend investing in a property on the metaverse or buying cryptocurrency of any sort without fully understanding all the risks to your real-world  money.

For those on a smaller budget, there are virtual properties with a lower monthly mortgage cost. These affordable options make metaverse real estate more accessible, allowing more people to get their foot on the virtual property ladder.

graphic of fake cities

From our research, we found Arcade Land (standard) to be the ‘cheapest’ virtual asset. Our calculations show that a mortgage for this land would cost you £25 per month. Alternatively, you can upgrade to Arcade Land (large) for an additional £3 per month, with monthly repayments of £28, while an extra-large plot carries a monthly repayment of £62.

If you’d like to purchase virtual property in the Worldwide Webb Land, a small apartment will cost £29 per month or upgrade to a medium apartment for £35.

The future of metaverse mortgages

As the digital world keeps progressing and immersive technologies continue to evolve, it’s predicted we may spend more time on new metaverse platforms. From the world of work to entertainment, the metaverse offers an immersive experience like no other, providing digital spaces for communities to interact, create and invest

Although the internet is infinite, the number of virtual plots and properties is limited. This is because there are only a set number of assets available in each world—an exclusivity that creates demand and drives prices. With so much of our time spent online, it seems that metaverse mortgages—and virtual property investments—could become more commonplace over the next few years.

Editor’s note: this guide is for informational and entertainment purposes only, money.co.uk would not recommend investing in a property on the metaverse or buying cryptocurrency of any sort without fully understanding all the risks to your real-world  money. 

Cryptocurrencies are highly volatile and unregulated in the UK. Your capital is at risk and lack of consumer protection means that it is likely you may get back less than you originally invested.

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Whether you're curious about mortgages on the moon or looking for advice on securing a real-life mortgage, our guides will tell you everything you need to know about how they work, and which one could be most suited to you.

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About James Andrews

James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments - picking up a series of awards for his journalism along the way.

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