How to use this home equity investment calculator
- Home: its value, the cash offered before fees, the years until you pay back and a guess at price growth.
- Deal: whether the share is of the home's whole value or only its growth, the share, and for growth-only contracts the starting value the growth is measured from.
- Costs: the fee, the cap (0 if none) and a loan rate to compare.
It starts with the CFPB's example: $50,000 for a 20% share of a $500,000 home. The 4% fee, 18% cap and 3% growth are examples; replace them with your offer.
How a home equity investment works
A home equity investment, also called a home equity agreement, shared equity agreement or home equity contract, gives you a lump sum now. In exchange you repay a single amount later that depends on your home's value. You make no monthly payments to the company, but you keep paying property taxes, insurance, upkeep and any mortgage. Repayment is due at the end of the term, often 10 to 30 years, or earlier at a trigger such as a sale, and the company secures its claim with a lien on the home.
How the payback is calculated
Each company has its own formula. Some apply the share to the whole value, others only to the change in value:
Share of value: payback = share × home value when you pay back
Example: 20% × $671,958 (a $500,000 home after 10 years at 3% a year) = $134,392
Share of growth: payback = cash + share × (home value when you pay back − starting value)
Example: $50,000 + 28% × ($671,958 − $365,000) = $135,948
Cap: payback is never more than cash × (1 + cap ÷ 12)12 × years
Example: $50,000 at 18% for 10 years = $298,466
The multiple. In the CFPB's example, cash worth 10% of the home buys a 20% share, a 2x multiple: the company doubles its money before any price growth and loses only if the home loses more than half its value.
The starting value. Some companies set it below the appraisal; in the CFPB's example 25% lower, so the company comes out ahead unless the price falls by more than that. The calculator's growth-only example (28% of the growth above a starting value 27% below the appraisal) follows Point's online cost estimator for cash equal to 10% of the home's value.
The cap. The CFPB found several companies with caps around 18-20% compounded monthly, so the amount owed cannot grow faster than about 19.5-22% a year. Early on, the cap often sets the payback: after 2 years the example takes $71,475, 19.6% a year.
Why the cost rises with your home's value
The investor's share moves with your home, so the more it gains, the more you pay back. In the example, the payback after 10 years is $81,707 if prices fall 2% a year and $162,889 if they rise 5%: from 5.5% to 13.0% a year on the $48,000 in hand (the table in the breakdown above has more rates). Nobody knows the growth in advance: US home prices have changed between -5.6% and 16.8% a year, with a long-term average of about 5%, according to the FHFA figures the CFPB cites, and single neighborhoods swing more.
Home equity investment vs. HELOC vs. home equity loan
| Home equity investment | HELOC or home equity loan | |
|---|---|---|
| Monthly payments | None to the company | Yes: interest, or interest and principal |
| What you repay | One amount set by your home's value, often a multiple of the cash | The amount borrowed plus interest |
| Qualifying | Marketed with no income requirement and to low credit scores | Stricter credit and income checks |
| Upfront fees | Processing fees often 3% to 5% of the cash, plus third-party costs | Vary; usually lower |
In the example, $48,000 as a 10-year home equity loan at 8% costs $582 a month, 8.3% a year with monthly compounding. The investment costs 10.8% a year at 3% growth, more than the loan whenever the home's value grows faster than about 0.6% a year. The CFPB compared a contract with a $50,000 HELOC at 9% by adding up the dollars paid over 10 years, without counting when they are paid; on that measure the contract came out cheaper only if the home lost at least 5% of its value. Our HELOC calculator and home equity loan calculator show the loan side in detail.
Terms at some home equity investment companies
The CFPB named Unison, Point, Hometap and Unlock as the four largest companies in 2024; Splitero is a smaller one. Below are the terms each published on its website on October 7, 2026, alphabetically (Hometap's and Unison's sites could not be read that day). Terms change, and your contract decides. We are not paid by any of these companies.
| Company | The share is of | Fee | Term | Cap |
|---|---|---|---|---|
| Point | Growth: you repay the cash plus a portion of the growth above an “appreciation starting value” set below the appraisal; Point shares a loss below it | Up to 3.9% ($2,000 minimum) plus third-party costs | 30 years | A maximum percentage, calculated annually |
| Splitero | Value: a “split percentage” of the home's value when you repurchase; cash up to 25% of the appraised value | 4.99% plus about $1,000 in third-party costs | As long as your senior mortgage, at least 10 and at most 30 years | 17.99% a year, compounded monthly |
| Unlock | Value: the “Unlock percentage”, based on an exchange rate, of the ending home value; starts from the full value | Up to 4.9% of the cash, subject to state law, plus third-party costs | 10 years | 19.9% a year on the cash (lower where state law requires) |
Risks to check before you sign
- One large payment, in full, at the end of the term or at a sale. Without savings or a new loan, the way out is often selling the home; an unpaid contract can end in foreclosure.
- Refinancing can get harder. The company's lien may limit your ability to refinance your mortgage or take on new debt.
- The home's value decides the bill. The final value is usually the sale price, which the company may dispute (for example after a distressed sale); otherwise an appraiser hired by the company typically sets it.
- Upkeep counts. If the home is not kept to the contract's standard, the payback can rise. Some companies credit improvements that add value; others do not.
Home equity investment questions people ask
Are home equity investments a good idea?
They are usually expensive. The CFPB found that under many contracts the amount owed grows 19.5-22% a year in the early years, and that they tend to cost more than home-secured loans even over longer terms. In the calculator's example, $48,000 in hand costs $86,392 over 10 years if the home gains 3% a year: about 10.8% a year, against 8.3% for a home equity loan at 8%.
What percentage does a home equity agreement take?
It depends on the cash and the contract's multiple. In the CFPB's example, cash equal to 10% of the home's value buys a 20% share of its future value, a 2x multiple. In Splitero's published example, $100,000 on a $1,000,000 home buys a 20% share; Unlock's estimator uses an exchange rate of 1.8. Contracts that share only the growth take a larger percentage of a smaller base.
What is the catch to a home equity agreement?
You owe one large amount that grows with your home's value, due in full at the end of the term (often 10 to 30 years) or when you sell, usually with no partial payments. If you cannot pay, you may have to sell or face foreclosure. The company's lien can make refinancing harder, and processing fees are often 3% to 5% of the cash.
Can you pay off a HEI early?
Usually yes, in full; the CFPB notes that partial payments are generally not allowed and some companies restrict repayment early in the term. Point says there is no prepayment penalty, and Unlock allows partial buyouts. Paying back early tends to cost the most a year: in the calculator's example, paying back after 2 years takes $71,475, set by the cap, about 19.6% a year before fees.
Which is better, a home equity investment or a home equity loan?
A home equity loan usually costs less if you can qualify and afford the payment. In the calculator's example, $48,000 as a 10-year loan at 8% costs $582 a month and $21,885 in interest. The investment has no monthly payment but costs $86,392 if the home gains 3% a year. It costs more a year than the loan whenever the home's value grows faster than about 0.6% a year.
Is an HEA better than a HELOC?
A HELOC usually costs less, but it has monthly payments and a variable rate, and lenders check credit and income more strictly. The CFPB compared a $50,000 HELOC at 9% with interest-only payments of $375 a month ($45,000 in interest over 10 years) with a home equity contract for the same cash that would take $94,074 to $215,892 to settle after 10 years. The contract came out cheaper only if the home lost at least 5% of its value.
What is the cheapest way to get equity out of a house?
If you qualify, usually a loan secured by the home: a HELOC, a home equity loan or a cash-out refinance. The CFPB found home equity contracts expensive compared with these options. Compare offers by cost a year with fees included. Selling the home also frees the equity, with no new debt.
Is Hometap a good deal?
That depends on the offer (the cash, the share, the fees, the cap) and on how much your home's value changes before you pay back. Enter the terms of a Hometap offer, or any other company's, in the calculator to see the payback and the cost a year, and compare it with a loan you could get. The CFPB lists Hometap among the four largest companies in 2024.
Sources
- CFPB: Issue Spotlight: Home Equity Contracts: Market Overview (January 15, 2025) - how contracts work, multiples, starting-value discounts, caps, fees, costs, risks
- Point: How the HEI works - share of appreciation, appreciation starting value, fee, term, cap
- Point: HEI cost estimator script - the calculator's growth-only example terms
- Splitero: Pricing - split percentage, fee, Safety Cap, example
- Unlock: What it costs - fee, Annualized Cost Limit, exchange rate
- Unlock: How it works - term, origination fee
- Unlock: FAQs - how the Unlock share is calculated, partial buyouts
- Federal Reserve Bank of St. Louis (FRED): Bank Prime Loan Rate - HELOC comparison rate
- U.S. Bank: Home equity loan - home equity loan example rate
- Navy Federal: Home equity rates - home equity loan example rate
More calculators
- HELOC calculatorYour HELOC limit, the interest-only payment and the payment after the draw period ends.
- Home equity calculatorYour equity in dollars and percent, LTV and CLTV, and how much you may borrow at 80%, 85% and 90% caps.
- Home equity loan calculatorYour fixed monthly payment, total interest and estimated maximum loan, next to a HELOC on the same amount.
- Cash-out refi vs. HELOCKeep your mortgage and add a HELOC, or refinance for cash: which costs less over the years you choose.
- Compare home equity optionsHELOC, home equity loan, cash-out refi, home equity investment, 401(k) loan: what each costs for your cash and timeline.