Here are some thoughts, imagine I ask for a loan of 1 bitcoin right now, that's around 916 euros, and I'm going to pay in the next 12 months, 5% interest, if bitcoin's price continues to increase and it can increase to 3000 euros by the end of next year I will spend a lot of money to pay that 1 bitcoin.
What will happen, probably I will default, because that kind of interest is a ripoff, many people will do so, and I'm assuming honesty here not simply trying to scam people.
What can you do when people don't honor their payments?
This is a serious problem with loans denominated in bitcoin, the price is not stable enough to allow for this to happen.
As a Bitcoin-only company I've had plenty of time to think about that issue and, in my case, I say that IF I borrow Bitcoin (to grow the company) and Bitcoin goes up (thus making it harder to repay the Bitcoin) THEN, since my business model is to help people EARN Bitcoin, the rapid rise in Bitcoin price will also increase my customer base, increase my earnings and I would still be able to pay the higher value Bitcoin back.
The point of the observation is that if a Bitcoin loan is made to a business who's success also depends on Bitcoin then the risk of Bitcoin's fluctuations are somewhat shared and hedged (in a way). It is a tough step to stop thinking in "fiat" and to start thinking in "Bitcoin" :-)
Well what actually happens is you've now taken an already very very risky business and amplified that to 2^4. It's just a terrible idea to take any long term longs out in bitcoins. There are no companies in the world that do bitcoin mortgages and if they did it would be based off of a fiat denomination. Did you know you can get paid in bitcoins through some companies? Did you know that even those companies base the oay off of a local fiat currency's value. It's just a bad idea.