By EquityBankLoan Editorial Team
Research assistance: Chris, EquityBankLoan AI Research Agent
Editorial oversight: Michael Yanda
Provider terms checked: November 1, 2026
A home equity investment gives you a lump sum of cash now in exchange for a share of your home’s value later. There is no monthly payment and no interest rate. Instead, you make one large payment when you sell, refinance, buy the company out, or reach the end of the term. Some companies call the same thing a home equity agreement, or HEA. Others call it an HEI or an equity sharing agreement.
These contracts are sold as an alternative to a HELOC or a home equity loan, and for some homeowners they are the only option on the table. They can also cost far more than either. This guide compares a HELOC with a home equity investment and a home equity loan: how the repayment is worked out, what each can cost, the pros and cons, and what the largest companies publish about their terms, with the date we read each one.
The short version: if you can qualify for a HELOC or a home equity loan and can afford the monthly payment, the Consumer Financial Protection Bureau’s analysis suggests a home equity investment will often cost more over time. It tends to come out ahead only if your home loses value. Its real advantage is access: no monthly payment and looser credit and income requirements.
What a home equity investment is
The CFPB calls these products home equity contracts and notes they are “often called” home equity investments, home equity agreements, or shared equity agreements. In its January 2025 report, the bureau describes a deal where the homeowner gets an upfront payment from a company and must later make “a single lump sum repayment in the future that is based, in part, on the home’s value.”
A few things follow from that structure:
- You keep living in the home and keep paying for it. Property taxes, insurance, maintenance and your existing mortgage stay your responsibility.
- The company records a lien. The CFPB says the company secures its interest “with a lien on the property, just as lenders do for traditional mortgages.” Hometap, Unlock and Point each say on their own sites that they place a lien on the home.
- The term is long but fixed. The CFPB puts typical terms at 10 to 30 years. You have to settle by the end, or earlier if you sell.
- The final payment moves with your home’s value. That is what makes the cost hard to know in advance.
Is it a loan? The companies say no. Hometap, for example, says it has “no guaranteed return on the money we’ve invested.” The CFPB has questioned that framing and says advertisements “claim home equity contracts are not debt.” Whatever the label, you are taking money now against your home and owing a larger sum later, and the contract is secured by your house.
How the repayment is worked out
Each company uses its own formula, which is one reason these contracts are hard to compare. The CFPB says they all start from the same ingredients: the upfront payment, the home’s starting and ending values, and a multiplier. Several other features then push the number up or hold it down.
The multiplier
You usually get less cash than the share of the home you give up. The CFPB’s example: a homeowner receives 10% of the home’s value and agrees to give the company a 20% stake in its future value. That is a 2x multiplier, so the company doubles its money before the home has gained a dollar in value. Some companies apply the multiplier to the whole value of the home. Others apply it only to the change in value. The same percentage can mean very different costs depending on which method a company uses.
A discounted starting value
Some companies set the home’s starting value below what it appraised for. The CFPB’s example uses a 25% discount. Point calls this a home value risk adjustment and says its starting value is “a majority percentage” of the appraised value. The lower the starting value, the more “appreciation” the company shares in, even if the market never moves.
Caps
Most contracts cap how fast the amount you owe can grow. The CFPB found that as of 2024 several companies had caps “around 18-20%, compounded monthly,” which means the settlement can grow by about 19.5% to 22% a year. Unlock calls its version an Annual Cost Limit and says it is typically 19.9% and does not compound. Point calls its version a Homeowner Protection Cap. A cap protects you from paying a huge share after a big jump in prices. It does not make the product cheap. In the CFPB’s worked example, the cap set the cost for the first two to six years of the contract, the equivalent of 20% interest a year.
Upfront fees
Fees come out of the cash you receive. The CFPB says processing fees are “often 3-5% of the initial payment,” plus third-party costs such as appraisal, title and recording. The published fees we found are in the provider table below.
What it can cost: the CFPB’s worked example
The CFPB built a simplified example that it says does not reflect any one company’s terms. A homeowner with a $500,000 home takes $50,000, which is 10% of the value. The company gets a 20% stake and its return is capped at 20% a year.
- If the home gains 6% a year, she owes $86,400 to settle in year 3 and $179,085 at the end of year 10.
- If the home immediately loses 30% of its value and then recovers by 3% a year, she still owes $76,491 in year 3 and $81,149 in year 10.
- Across the CFPB’s four price scenarios, the year 10 payment ranged from $94,074 to $215,892.
The CFPB set that against a $50,000 HELOC at 9% with interest-only payments of $375 a month. Over 10 years the HELOC costs $45,000 in interest plus the $50,000 still owed, $95,000 in total. The bureau concluded the home equity contract “would be less expensive overall only if the home value falls by at least 5% from its starting value 10 years earlier.” The comparison leaves out upfront fees, which the CFPB says are typically much higher for home equity contracts than for HELOCs.
That HELOC example is worth checking against your own numbers. A 9% rate is the CFPB’s assumption, not a current rate, and a HELOC payment can jump when the draw period ends. Our HELOC payment shock calculator shows what that jump looks like for your balance.
HELOC vs. home equity investment vs. home equity loan
| Home equity investment (HEI or HEA) | HELOC | Home equity loan | |
|---|---|---|---|
| What you get | A lump sum, once | A credit line you draw on as needed | A lump sum, once |
| Monthly payments | None to the company. You still pay taxes, insurance and your mortgage | Yes. Often interest only during the draw period, higher in repayment | Yes, regular installments |
| How the cost is set | A share of your home’s future value, subject to any cap, plus upfront fees | Interest on what you draw, usually at a variable rate | Interest on the full amount, at a fixed or adjustable rate |
| Is there an APR? | No. The cost depends on what your home is worth when you settle | Yes | Yes |
| How you repay | One payment at sale, buyout or end of term | Monthly, then the balance is repaid over the repayment period | Monthly over the loan term |
| Term | Typically 10 to 30 years, depending on the company | A draw period (the CFPB gives 10 years as an example), then repayment, often over 10 or 20 years | Set by the lender |
| Who qualifies | Mostly based on equity. Published credit minimums start at 500 to 575 and income is not required by the companies below | Credit, income, debt to income and equity | Credit, income, debt to income and equity |
| If your home gains value | You pay more, up to the cap | No effect on what you owe | No effect on what you owe |
| If your home loses value | You may pay less, depending on the contract | No effect on what you owe | No effect on what you owe |
| Secured by your home | Yes, by a lien | Yes | Yes |
For more on the two loan options, see What is a HELOC and how does it work? and our home equity loans guide. To see which documented lenders publish terms that fit your credit score, CLTV and state, use Compare.
Home equity agreement pros and cons
Pros
- No monthly payment to the company. If a new payment is what you cannot take on, this is the main draw.
- Easier to qualify for. Hometap, Unlock and Point publish credit minimums of 575, 500 and 500, and none of the three requires income. Unlock says it uses only a soft credit pull.
- Your first mortgage stays in place. As with a HELOC or home equity loan, a low first mortgage rate is not disturbed.
- Some downside sharing. Point and Unison say you may repay less than you received if your home loses enough value. Unlock’s share is a percentage of the ending value, so a lower value means a lower payment.
- No prepayment penalty at the companies we checked. Hometap, Unlock and Point all say you can settle early without a penalty.
Cons
- Usually more expensive. The CFPB found the settlement amount can grow by about 19.5% to 22% a year in the early years, which is “substantially higher than interest rates on most home-secured credit.”
- One large payment at the end. The CFPB says the amount can run “in the hundreds of thousands of dollars,” and homeowners who cannot pay it “risk having to sell their home or face foreclosure.”
- The cost is hard to predict. It depends on a home value nobody knows yet, and each company calculates it differently. The CFPB notes disclosures are not standardized.
- Higher upfront fees. Hometap publishes a 4.5% fee, and Point and Unlock publish fees of up to 4.9%, before third-party costs such as appraisal and title.
- It can get in the way of refinancing. The company holds a lien. Unlock, for example, says a cash-out refinance requires settling the agreement first, and that some lenders may decline to lend behind an active agreement.
- Rules on how you use the home. Contracts can limit renting, require you to notify the company before taking new debt, and adjust the payout if the home is not maintained.
- Little track record at the end of term. The CFPB points out that several companies were founded less than ten years ago, so there is not yet much evidence on how customers fare when contracts come due.
When it might make sense, and when it usually does not
A home equity investment is easiest to justify when you have a lot of equity, a clear plan to sell or refinance within the term, and no realistic way to carry a monthly payment or qualify for a loan. The CFPB notes that people sometimes turn to these contracts after being turned down for a HELOC or a cash-out refinance.
It is harder to justify if you can qualify for a HELOC or home equity loan and afford the payment, if you expect your home to gain value, or if you want to stay in the home long after the term ends. In that last case you will need savings or new financing to buy the company out, and the CFPB’s review of complaints found homeowners frustrated that selling seemed to be their only way out.
If you are 62 or older, also look at a federally insured reverse mortgage, known as a HECM. The CFPB notes that a HECM also requires no monthly payment, but it requires counseling with a HUD-certified housing counseling agency first and generally lets you stay until you move or die, rather than forcing repayment at a fixed date.
Home equity investment companies
The CFPB names Unison, Point, Hometap and Unlock as the four companies that dominated the market as of 2024. It lists Aspire, Splitero, Balance Homes, EquiFi and QuantumRE among the smaller ones. The table shows what three of the largest publish on their own websites. We read each page on November 1, 2026. These companies change their terms, so confirm everything with the company before you apply. Nothing here is ranked, and the order is alphabetical.
| Hometap | Point | Unlock | |
|---|---|---|---|
| What they call it | Home equity investment | Home equity investment | Home equity agreement |
| Cash available | $15,000 to $600,000. Minimum varies by state | Point’s HEI page shows $30,000 to $600,000 in one place and $25,000 to $500,000 in another. Confirm with Point | $15,000 to $500,000 |
| Most of your home’s value you can access | 27% | Not published on the pages we read | Not published as a percentage. Unlock’s share is capped at 49.99% of the home’s value |
| Term | 10 years | 30 years | 10 years |
| Minimum credit score | 575 (FICO) | 500 | 500 for a single-family home or townhome you live in. 550 for condos, 2 to 4 units, second homes and investment properties |
| Equity required | At least 25%. Typically a 75% maximum loan to value | Not published on the pages we read | At least 30%. Home worth at least $175,000 |
| Company fee | 4.5% of the investment, up to $20,000, plus third-party costs | Up to 4.9%, with a $2,000 minimum, plus third-party costs (see note below) | Typically 4.9%, subject to state law, plus third-party costs |
| Cap on what you repay | Not described on the pages we read | Homeowner Protection Cap, a maximum percentage calculated each year | Annual Cost Limit, typically 19.9%, not compounding |
| Starting value adjustment | Not described on the pages we read | Yes. Starting value is “a majority percentage” of the appraised value | Not described on the pages we read |
| Credit for improvements | May adjust for qualified renovations of $25,000 or more | Not described on the pages we read | May adjust if improvements add $10,000 or more in value |
| Partial buyouts | Not described on the pages we read | Not described on the pages we read | Allowed with approval. You must keep at least 25% of Unlock’s original percentage in place |
| States | 26 states listed on its FAQ page | Not located on the pages we read | 25 states listed on its homepage |
A note on Point’s fee. The disclosure printed on Point’s HEI pages says “up to a 4.9% processing fee (subject to a $2,000 minimum).” Data embedded in one of those pages for search engines says 3.9%. We show the printed figure and recommend asking Point for the fee on your offer. The same figures, with each company’s sources and the date we read them, are also on our Compare page.
Unison calls its product an equity sharing agreement. Its homepage describes a term of up to 30 years with no monthly payments, says you repay the original amount plus or minus Unison’s share of the change in your home’s value, and says you may owe less than you received if your home loses value. We could not read the rest of Unison’s terms on November 1, 2026.
Splitero says its term runs as long as your senior mortgage or at least 10 years, up to a maximum of 30 years, with no income or employment requirements. Its homepage did not publish amounts, fees or credit minimums when we read it.
State rules differ. Point says its HEI is offered as a licensed mortgage product in Colorado, Connecticut, Georgia, Illinois, Maryland, North Carolina, Oregon, Washington and Wisconsin, and that HEIs in other states “are not currently required to be licensed.” You can look up any company’s licenses on NMLS Consumer Access.
Questions to ask before you sign
- What will I owe if I settle in year 3, year 5 and at the end of the term, if my home gains 0%, 3% and 6% a year?
- Is your share based on the whole value of the home or only on the change in value?
- What starting value are you using, and how does it compare to the appraisal?
- Is there a cap? What is it, and does it compound?
- What are all the fees, in dollars, and how much cash will I actually receive?
- Can I make partial payments to reduce your share?
- What happens if I want to refinance my first mortgage, take a HELOC, or rent out the home?
- What happens at the end of the term if I cannot pay? Can the contract be extended?
- How is the ending value decided if I do not sell, and can I dispute it?
- How would I pay this off without selling the home?
Check the loan options first
Before you take a share of your home’s future value, it is worth knowing what a loan would look like.
- Work out your equity and CLTV. HEI companies want 25% to 30% equity, and lenders cap combined loan to value. This shows where you stand.
- Compare documented HELOC and home equity lenders against your credit score, CLTV and state.
- Model a HELOC payment, including the jump when the draw period ends, so you can set a real monthly cost against an HEI’s single payment.
- Read the lender pages, with the source and date behind every figure.
Frequently asked questions
What is the difference between a HELOC and an HEI?
A HELOC is a line of credit. You borrow as you need it, pay interest, and make monthly payments. An HEI is a lump sum with no monthly payment, repaid in one payment based on your home’s value when you settle. A HELOC’s cost depends on your rate and balance. An HEI’s cost depends on what happens to your home’s value.
Is a home equity agreement the same as a home equity investment?
Yes, for practical purposes. Unlock uses “home equity agreement,” Hometap and Point use “home equity investment,” and Unison uses “equity sharing agreement.” The CFPB groups them all as home equity contracts. The terms behind each name differ by company.
Is a home equity agreement a loan?
The companies say it is not, because there is no interest rate and no guaranteed return. It still works like secured financing in the ways that matter to you: you receive money now, you owe a larger amount later, and the company records a lien on your home.
Which is cheaper, a HELOC or a home equity investment?
In the CFPB’s 10-year example, the HELOC cost less unless the home lost at least 5% of its value. Your result depends on your HELOC rate, how long you keep the money, and what your home does. Ask any HEI company for its repayment figures at several dates and growth rates, and compare them with the total interest on a loan.
Can I pay off a home equity investment early?
Usually yes. Hometap, Unlock and Point each say you can settle at any time during the term without a prepayment penalty. You generally need the full settlement amount to do it. Unlock is the only one of the three that describes partial buyouts on the pages we read.
What happens at the end of the term?
You must pay the settlement amount, either from savings, with new financing, or by selling the home. Hometap says that if you do not settle by the end of its 10-year term, it may acquire a percentage ownership interest in the property and work with you to sell it.
What credit score do I need for a home equity investment?
Among the companies we checked, published minimums were 500 at Point, 500 or 550 at Unlock depending on the property, and 575 at Hometap. Equity matters more. Hometap asks for at least 25% and Unlock for at least 30%.
What if my home loses value?
Depending on the contract, you may owe less. But discounted starting values and multipliers mean the company can still come out ahead after a fall. In the CFPB’s example, a home that dropped 30% and then recovered slowly still produced a payment of $76,491 in year 3 on $50,000 received.
Can I refinance my mortgage with a home equity agreement in place?
Sometimes. It usually depends on whether the company agrees to keep its lien behind the new loan. Unlock says it may do this for some refinances, but a cash-out refinance requires settling the agreement first. The CFPB lists trouble refinancing among the problems consumers have reported.
Sources
- Consumer Financial Protection Bureau, Issue Spotlight: Home Equity Contracts: Market Overview (January 15, 2025)
- Consumer Financial Protection Bureau, What is a home equity line of credit (HELOC)?
- Consumer Financial Protection Bureau, What is the difference between a Home Equity Loan and a Home Equity Line of Credit (HELOC)?
- Hometap, FAQs and How it works
- Point, Home Equity Investment, How the HEI works and Licenses
- Unlock, Home page and disclosures and FAQs
- Unison, Home page
- Splitero, Home page
All sources checked on November 1, 2026.
This page is general information, not financial advice. It is not an offer of credit or an investment, and we are not a lender or a home equity investment company. We do not earn money from any company named here. Any agreement secured by your home puts your home at risk if you cannot meet its terms. Consider speaking to a qualified adviser or a HUD-approved housing counselor about your own circumstances.