Home equity investments can turn part of your home equity into cash without adding a required monthly payment. Instead of charging conventional loan interest, the company receives money later based on terms tied to your home's value.
That trade can make an HEI attractive when monthly cash flow matters. It can also make the eventual cost difficult to predict.
The Consumer Financial Protection Bureau (CFPB) says home equity investment contracts can require a single settlement payment that reaches hundreds of thousands of dollars. The amount may depend on the home's future value and the pricing formula written into the contract. The CFPB estimates that the four largest companies securitized about $1.1 billion backed by roughly 11,000 home equity contracts during the first 10 months of 2024.
For homeowners comparing home equity investments, the headline fee tells only part of the story. The starting home value, the company's share, the contract length, closing costs, and settlement rules can have a much greater effect on what the agreement eventually costs.
How Do Home Equity Investments Work?
A home equity investment, commonly shortened to HEI, provides cash upfront in exchange for a contractual financial interest connected to the home's future value.
The homeowner keeps ownership of the property. HEI companies generally protect their contractual interest by recording a lien or similar security instrument against the property. Point explicitly states that it places a lien on the home, Splitero records its agreement through a deed of trust, and EquiFi says it places a lien without going on the home's title.
During the agreement, there are generally no required monthly payments to the HEI provider. Settlement happens later, such as when the homeowner sells, buys out the company, or reaches the contract deadline.
The CFPB identifies the large single settlement payment as one of the defining characteristics of these contracts.
The important question, then, isn't simply how much cash you can get.
It's how the company calculates what you eventually give back.
The 4 Numbers That Can Determine What an HEI Costs
Home equity investments use different pricing formulas, so two homeowners receiving the same amount of cash can end up with very different settlement obligations.
Four numbers deserve particular attention.
1. The amount you actually receive
The advertised investment amount isn't necessarily the cash that reaches your bank account.
Provider fees and third-party closing expenses may be deducted before funding.
For example, Point currently charges a 3.9% processing fee, subject to a $2,000 minimum. It also lists possible appraisal, title, government, credit-report, flood-certification, and other closing expenses.
Splitero charges a 4.99% origination fee and estimates approximately $1,000 in additional appraisal, escrow, title, and recording expenses, though actual charges vary.
Unlock states that its origination fee can reach 4.9%, subject to applicable state limits, with third-party closing costs charged separately.
When comparing HEIs, use net proceeds after fees, rather than the advertised investment amount.
2. The starting value assigned to your home
An HEI needs a starting point for calculating future value.
That figure may not always work exactly as a homeowner expects from looking at the appraisal alone. Some contracts can apply adjustments when establishing the value used in their settlement calculations.
That means homeowners should identify three separate figures before signing:
- The appraised market value
- Any contractual adjustment to that value
- The final starting value used in the settlement formula
A relatively small adjustment at the beginning can affect the calculation years later.
3. The provider's contractual share
This is where HEIs can differ sharply.
Some structures give the company an agreed percentage of the home's future value. Others calculate the company's return using appreciation, depreciation, an adjusted starting value, or another contractual formula.
Hometap, for example, introduced new pricing in June 2026. Under its current structure, an investment representing 10% of the home's value would correspond to a 16.5% Hometap percentage when settled during years one through five and 18% during years six through 10. Individual percentages depend on the agreement.
Unlock uses what it calls an Exchange Rate to establish its percentage of the home's value. Its March 2026 product guide states that the homeowner receives cash based on the home's starting value and later pays Unlock its contractual percentage when the agreement ends, subject to applicable cost limits.
Splitero establishes its share before funding and receives that agreed percentage of the home's value when the homeowner exits the investment.
This is why comparing HEIs by origination fee alone can produce the wrong conclusion.
4. The home's value when you settle
Future home value is the variable nobody knows at signing.
If a settlement formula gives the HEI company a percentage tied to future home value or appreciation, a rising property value can increase the dollar amount required to settle.
Some providers place limits on their potential return. Those protections matter, though a cap shouldn't automatically be treated as the expected cost.
Hometap's current cap limits its return to an 18.5% annual rate compounded monthly, or a lower amount when required by state law.
Before signing, ask the provider to show settlement calculations under several home-price outcomes.
What Could a Home Equity Investment Cost?
A simple hypothetical shows why the settlement formula deserves greater attention than the headline fee.
Suppose a home is worth $500,000 and the homeowner receives $50,000, equal to 10% of the home's starting value.
Assume, purely for illustration, that the contract gives the provider a 20% share of the home's value at settlement.
If the home later sells for $550,000, that 20% share equals $110,000.
At $650,000, it equals $130,000.
At $750,000, it equals $150,000.
Those figures aren't quotes from a particular provider, and actual HEI contracts may apply adjustments, caps, fees, deductions, or different formulas. The example shows why the percentage attached to future home value can matter so much.
A homeowner comparing a 3.9% upfront fee with a 4.9% fee might focus on a difference of $500 on a $50,000 investment. The eventual settlement formula can create a much larger dollar difference.
Home Equity Investment Fees and Terms Compared
Current provider terms show how differently these agreements can be structured.
| Provider | Published funding | Upfront provider fee | Published term | Notable feature |
|---|---|---|---|---|
| Hometap | Depends on qualification | Pricing varies by agreement | Up to 10 years | Current pricing changes after year 5 |
| Point | Up to $600,000 | 3.9%, $2,000 minimum | 30 years | No required monthly payments |
| Unison | Up to $500,000 | 3.9% transaction fee* | Up to 30 years | Shares in future change in home value |
| Unlock | Depends on qualification | Up to 4.9% | Up to 10 years | Uses an Exchange Rate |
| Splitero | Up to $600,000 | 4.99% | 10–30 years | Term can match senior mortgage maturity |
| EquiFi | Up to 35% of home value in some equity-access transactions | 3% disbursement fee, reduced for some larger transactions | No fixed term in years | Settlement tied to terminating events |
*Unison's current calculator materials identify a 3.9% transaction fee that reduces net proceeds.
Terms are subject to underwriting, state restrictions, individual agreements, and change. Third-party expenses may apply separately. Point, Unison, Splitero, EquiFi, and Unlock currently publish the terms summarized above on their official sites.
The table is best used as a starting point. An actual offer and settlement illustration matter far more than an advertised maximum.
Why a 10-Year HEI Can Feel Very Different From a 30-Year HEI
Contract length affects much more than convenience.
A 10-year HEI gives the homeowner a decade to decide how to settle. A 30-year agreement provides a much longer window.
Point currently uses a 30-year term. Unlock uses a 10-year term. Splitero says its Maturity Match structure can run from 10 to 30 years based on the senior mortgage.
Neither term is automatically better.
A shorter agreement creates an earlier deadline. If the homeowner can't settle with available cash, another financing source may be needed. Selling the property may become another possible exit.
A longer agreement delays that deadline, though the home's value has much longer to change.
Before accepting a 10-year contract, ask a practical question:
How would I pay this off if I still own the house in year 10?
That answer matters as much as the amount of cash received today.
What Happens If Home Prices Rise?
Rising home prices can increase the settlement amount when the provider's return is tied to future home value or appreciation.
The CFPB specifically warns that HEI repayment amounts can be difficult to predict. Unlike a conventional loan balance, the eventual obligation may depend heavily on property values years into the future.
A homeowner should therefore request calculations for several scenarios before signing:
- Little or no appreciation
- Moderate appreciation
- Strong appreciation
- An early settlement
- Settlement at the contractual deadline
Don't rely solely on the provider's central or preferred example. Run the agreement through outcomes that would be financially uncomfortable too.
What Happens If the Home Loses Value?
A falling home price doesn't necessarily mean the homeowner can simply return less than the original cash received.
The answer depends on the contract.
Some providers participate in declines under specified circumstances. Unison, for instance, describes its arrangement as sharing in the home's future change in value "up or down."
Other structures calculate settlement differently.
This is an area where general descriptions of home equity investments become risky. Homeowners should read the actual depreciation provisions rather than assuming that "equity sharing" means losses are divided evenly.
Ask exactly how much would be due if the property were worth 5%, 10%, or 20% less at settlement.
Can a Home Equity Investment Affect Refinancing?
Potentially, yes.
HEI providers commonly secure their agreements against the property. Point states that it places a lien on the home. EquiFi says it does the same, and Splitero records its agreement through a deed of trust.
That matters when another lender later evaluates the property.
A refinance may require dealing with the HEI provider's existing interest, depending on the new lender's requirements and the HEI contract.
This deserves attention from homeowners who expect to refinance during the agreement. A 30-year HEI, for example, can overlap with several future mortgage decisions.
Ask the provider what happens if you refinance and get the answer in writing before signing.
Home Equity Investments vs. HELOCs and Home Equity Loans
The biggest difference is how and when homeowners pay for access to their equity.
A home equity loan provides a lump sum secured by the home and usually carries a fixed interest rate. A HELOC is revolving credit secured by home equity and usually has an adjustable rate. Both require repayment under loan terms.
An HEI generally removes the required monthly payment to the HEI company. In exchange, the homeowner accepts a future settlement calculation tied to the contract and property value.
| Feature | Home equity investment | Home equity loan | HELOC |
| Cash | Usually upfront lump sum | Lump sum | Draw as needed |
| Monthly payment | Generally none to HEI provider | Required | Required |
| Interest rate | No conventional loan interest rate | Usually fixed | Usually adjustable |
| Cost tied to home value | Yes | No | No |
| Future cost certainty | Lower | Higher | Depends partly on future rates and borrowing |
| Home secures agreement | Generally yes | Yes | Yes |
| Repayment structure | Large future settlement | Scheduled loan payments | Draw and repayment periods |
The CFPB notes that both home equity loans and HELOCs use the home as collateral. Falling behind can therefore put the property at risk.
The decision often comes down to cash flow versus cost certainty.
An HEI removes another required monthly payment. A conventional home equity loan gives the homeowner a repayment schedule that is generally easier to estimate from the start.
Who Might Find a Home Equity Investment Useful?
An HEI may deserve attention when a homeowner:
- Has substantial home equity but wants to avoid another required monthly payment
- Needs a lump sum rather than revolving credit
- Has difficulty meeting conventional loan qualification requirements
- Understands how the settlement calculation works
- Has a realistic way to settle before the contract expires
- Has compared the HEI against available loan alternatives
Point, for example, currently advertises eligibility for qualifying homeowners with credit scores of 500 or higher and no income requirement, illustrating how HEIs can use qualification standards that differ from conventional lending.
Qualification, however, doesn't establish affordability.
A homeowner still needs to decide if the future value being exchanged is reasonable for the cash received today.
When Might a Home Equity Investment Be a Poor Fit?
An HEI may deserve extra caution when the homeowner expects substantial appreciation, plans to refinance soon, doesn't understand the settlement formula, or has no realistic plan for handling the eventual payment.
It may also be less attractive when the homeowner qualifies for conventional financing at a cost they can comfortably carry.
The CFPB characterizes home equity contracts as a niche product that can carry substantial and difficult-to-predict repayment obligations.
No required monthly payment shouldn't be confused with low cost.
The payment has been moved into the future.
9 Questions to Ask Before Signing a Home Equity Investment
A useful HEI comparison should end with the contract, not the marketing page.
Ask each provider:
- How much cash will I actually receive after every fee?
- What value are you assigning to my home at signing?
- Do you adjust or discount the appraisal for settlement calculations?
- Exactly what percentage of my home's future value or appreciation will you receive?
- What would I owe if my home value stays flat?
- What would I owe if my home rises 10%, 25%, or 50%?
- Is there a cap on your return, and how is that cap calculated?
- What happens if I refinance, sell early, or want to buy you out?
- What happens if I reach the end of the term and can't afford settlement?
Get the answers in the contract or formal disclosures rather than relying on a sales conversation.
Compare the Future Bill, Not the Headline Fee
Home equity investments can give homeowners access to substantial cash without creating another required monthly payment. That's their central advantage.
Their central drawback is the uncertainty attached to settlement.
A 3.9% processing fee may appear cheaper than a 4.9% origination fee, yet that difference can become relatively small compared with what happens to the home's value and how each contract calculates the provider's share.
The best way to compare home equity investments is therefore not:
Which company gives me the most cash?
Or even:
Which company charges the lowest upfront fee?
The better question is:
How much cash will I receive today, and what could this agreement require me to pay under several realistic outcomes?
Put those numbers side by side. Check the starting-value calculation, provider share, term, cost cap, closing expenses, refinancing rules, and settlement conditions.
Home equity may have taken years to build. Before exchanging part of its future value for cash today, make sure the numbers work under a future that isn't perfectly predictable.
