- A home equity investment (HEI) gives you cash today in exchange for a share of your home's value later. It is not a loan.
- No monthly payment. No interest rate. Nothing is due until you sell, refinance, or buy the investment out — typically within 10 years.
- Qualifying leans on your equity, not your paycheck. There is no income requirement and no DTI cap, and credit minimums run far lower than a bank's.
- The trade: if your home appreciates sharply, an HEI costs more than a HELOC would have. If your home stalls or slips, it costs less.
- It's a real fit for equity-rich, cash-tight homeowners — self-employed, recently job-changed, rebuilding credit. It's a bad fit if you plan to stay forever and expect big appreciation.
If you bought a home before 2022, you are probably richer than your bank account suggests. Home values climbed hard, you locked a mortgage rate in the 3s, and on paper you may be sitting on $150,000, $250,000, or more in equity.
And none of it helps with the credit card balance, the roof, or the month where everything hit at once.
That's the trap: the traditional ways to reach home equity all hand you a new monthly obligation. A HELOC adds a variable-rate payment on top of your mortgage. A home equity loan adds a fixed one. A cash-out refinance replaces your 3.4% mortgage with today's rate — which, for most homeowners who locked in early, is the single most expensive way to raise cash available to them.
All three also run a lender's underwriting: pay stubs, debt-to-income limits, a credit score that usually needs to start with a 6 or 7. If your income is self-employed, commission-based, newly changed, or simply thinner than it was two years ago, the equity is right there on the appraisal and still out of reach.
There is a fourth door. It's smaller, newer, and genuinely different.
What is a home equity investment?
A home equity investment — sometimes called a home equity sharing agreement or an HEI — is a company paying you a lump sum of cash now in return for a percentage of what your home is worth later.
You are not borrowing money. There is no principal, no interest rate, and no amortization schedule, because there is no loan. What you've done is sell a slice of your home's future value for cash today. The company becomes a silent, non-occupying stakeholder in your property and waits.
Practically, that means:
- Nothing is due each month. Your budget is unchanged the day after funding.
- Your first mortgage is untouched. That 3.4% rate stays exactly where it is.
- You still own and control the home. You live in it, you decide on renovations, you decide when to sell. No one has occupancy rights or a say in your decisions.
- Settlement happens once, later. When you sell, refinance, or buy the investment out with cash, you pay the company its agreed share of the home's value at that moment.
HEIs emerged because of a genuine mismatch in the mortgage market: tens of millions of homeowners are equity-rich and cash-constrained, and conventional lending underwrites income rather than equity. An HEI underwrites the asset. That's the whole innovation — and the whole reason the cost structure looks so unfamiliar.
How it works, step by step
You get an estimate — before any application
You enter your address and basic details and find out in seconds whether you pre-qualify, along with roughly how much cash your equity could support. This comes before the application and the underwriting that follows it, so you can see your number before committing to anything.
The home is valued, and you're underwritten on equity
An independent assessment establishes your home's current value. Underwriting focuses on the property and your equity position rather than your income. Expect a credit check, but with a far lower floor than a bank's — and no pay stubs, no DTI ceiling, no employment requirement.
You review the terms — this is the part to read twice
Your offer states three numbers that matter: the cash amount, the percentage of your home's future value the company will be owed, and the length of the term. Those are the economics of the entire deal. Model the outcome at a few different future home values before you sign anything.
You close, and the cash is yours to use
Funding typically lands within a few business days of signing. The money is unrestricted — wipe out high-interest debt, cover the repair, build a real emergency fund, bridge a rough stretch. Then your monthly budget carries on exactly as it did before.
You settle once, on your timing
Any time inside the term you can settle: sell the home, refinance, or buy the investment out from savings. You pay the agreed share of the home's value at that point. There's no penalty for settling early, and no requirement to wait — which also means your cost is partly in your control.
Find out what your equity could unlock
Hometap's estimate takes a couple of minutes and doesn't commit you to anything — you find out whether you pre-qualify in seconds, before any application. Seeing the actual figure is the fastest way to know whether this is worth reading further about.
Check your estimateWhat it actually costs
This is where most articles get vague, so let's put real numbers on it. The honest answer is that an HEI's cost is variable and tied to your home's value — which is both the appeal and the risk.
Here's an illustrative deal. Say your home is worth $400,000 with a $150,000 mortgage, so you hold $250,000 in equity. You take $60,000 in cash. An upfront fee of 4.5% comes out, so roughly $57,300 lands in your account — third-party closing costs come out of the total too. In exchange, the company is owed 28% of your home's value at settlement.
One detail that catches people out: the share you owe is not fixed for the life of the deal. Hometap's published pricing steps up the longer you hold — its percentage rises at year 4 and again at year 7. Settling earlier means handing over a smaller slice, which is why the exit question below matters so much.
Ten years later, what you owe depends entirely on what the house is worth:
| If your home is worth… | You settle for | Cost above the $60,000 | Effective annual cost |
|---|---|---|---|
| $340,000 (value dropped 15%) | $95,200 | $35,200 | ~4.7% |
| $400,000 (flat) | $112,000 | $52,000 | ~6.4% |
| $500,000 (up 25%) | $140,000 | $80,000 | ~8.8% |
| $600,000 (up 50%) | $168,000 | $108,000 | ~10.8% |
Illustrative only — these are not Hometap's figures. Effective annual cost is compounded over 10 years on the $60,000 investment amount and excludes the upfront fee and closing costs. Actual cash amounts, share percentages, fees, terms, and any renovation adjustments vary by homeowner and are set in your agreement. Hometap publishes its own estimator with real pricing for your address and settlement year; use that for your actual numbers.
Read that table carefully, because it's the whole product in one picture. Your cost moves with your home's value. If the housing market in your area goes flat or soft, you'll pay less than a 9% HELOC would have charged you. If your home appreciates hard, you'll pay more — you've handed over a piece of that upside.
A HELOC at today's rates does the opposite: the cost is locked to a rate and completely indifferent to what your home does. Which structure is better depends on a thing nobody can tell you — where your local home values go over the next decade.
Reputable HEI providers cap their return. Hometap publishes a cap of 18.5% on the investment amount, compounded annually, which limits what you settle for in certain scenarios — so you're not exposed to an unbounded share if your home runs away. Note how high that ceiling sits, though: on a $60,000 investment it only starts binding above roughly $328,000 at year 10, so in most realistic outcomes the cap never comes into play and your cost is set purely by your home's value. Confirm the cap is written into any agreement you're offered; it's one of the most important terms in the document.
How an HEI compares to a HELOC, a home equity loan, and a cash-out refi
| Home equity investment | HELOC | Home equity loan | Cash-out refinance | |
|---|---|---|---|---|
| Monthly payment | None | Yes, variable | Yes, fixed | Yes, replaces current |
| Interest rate | None — shares value instead | Variable | Fixed | Fixed, at today's rate |
| Touches your 1st mortgage | No | No | No | Yes — you lose your rate |
| Income required | No | Yes | Yes | Yes |
| Typical credit floor | Mid-500s to 600 | 620–680+ | 620–680+ | 620+ |
| Cost if home value falls | Goes down | Unchanged | Unchanged | Unchanged |
| Cost if home value soars | Goes up | Unchanged | Unchanged | Unchanged |
| When you repay | Once, within ~10 yrs | Monthly, 10–20 yrs | Monthly, 5–30 yrs | Monthly, 15–30 yrs |
Credit floors, rates, and terms are general market ranges as of October 2026 and vary by provider, state, and borrower. Not a quote or an offer.
One row deserves singling out. If you hold a mortgage below roughly 4%, a cash-out refinance is almost certainly the wrong tool — you'd be surrendering a rate you can never get back in order to access your own equity. The arithmetic on that trade is brutal, and it's why HEIs and HELOCs have both grown while cash-out refis collapsed.
The real pros and cons
- No monthly payment — your cash flow is genuinely unchanged
- Your low first-mortgage rate stays intact
- No income or employment requirement; no DTI cap
- Credit requirements well below bank standards
- Your cost falls if your home's value falls
- Value you add through qualifying renovations can be carved out of the shared amount
- Unrestricted use of funds, and no prepayment penalty
- You give up a share of future appreciation — potentially a large one
- An upfront fee (commonly ~4.5%) reduces the cash you receive
- A lump sum comes due at the end of the term, so you need an exit plan
- Only available in a limited set of states
- You need meaningful equity already — roughly 25% or more
- Not reported like a loan, so it won't help you build credit
What is your exit? An HEI ends in a single settlement. If you intend to sell inside the term, the settlement comes out of the sale and the plan is self-executing. If you intend to stay, you need a credible path to refinancing or buying the investment out — and the better your home performs, the larger that number gets. Homeowners who get burned are almost always the ones who never answered this.
Know what happens if you reach the end of the term without settling: Hometap's own terms state it may then exercise a right to acquire a percentage ownership interest in the property and work with you to sell it. The 10-year clock is real, and running out of it is not a neutral outcome.
Who this is actually right for
Strong fit
- You're self-employed, 1099, or commission-based. Your income is real but it doesn't document the way lenders want. Equity-based underwriting sidesteps the entire problem.
- Your credit is mid-rebuild. You've had a rough couple of years and you're in the 560–650 range. A HELOC desk says no; an HEI may not.
- Your budget cannot absorb another payment. You need the cash precisely because things are tight — which is exactly when a new monthly obligation is most dangerous.
- You're going to sell in the next 5–10 years anyway. The settlement folds into the closing. This is the cleanest version of the deal.
- You're clearing high-interest debt. Trading 26% revolving credit card interest for an HEI's structure is often the whole case by itself.
Poor fit
- You have strong income and a 720 score. You'll likely do better on a HELOC. Price both.
- You're in a fast-appreciating market and never moving. You'd be handing over a share of the most valuable thing you own.
- You need a small amount. Minimums start around $15,000; for less than that, a personal loan or 0% card is simpler.
- You have little equity. Below roughly 25%, you likely won't qualify.
- You don't have an exit plan. See the warning above. This is the disqualifier.
The provider we point homeowners to
The HEI market is small, and it matters who you deal with — terms, caps, and transparency vary a lot. Among the national providers, Hometap is the one with the longest track record and the clearest published terms, which is why it's the partner we feature here.
Tap your home equity in cash — with no monthly payments
- $15,000 to $600,000 in cash, with no monthly payments and no interest
- Settle any time within the 10-year term — sell, refinance, or buy out
- No income or employment requirement and no maximum DTI
- Qualify with a 575 FICO and about 25% equity in your home
- Find out if you pre-qualify in seconds — before any application
Common questions
No. There is no principal balance, no interest rate, and no monthly payment, because you are not borrowing. You're selling a share of your home's future value for cash now. That distinction drives everything else about how it's priced, qualified for, and repaid.
They hold a recorded interest in the property to secure their position, similar in mechanics to how a lender records a lien. But you remain the owner and the sole occupant. No one gains occupancy rights, a vote on renovations, or any say in when you sell.
Far less than a bank requires. Hometap's published minimum is a 575 FICO, against the 620–680 a HELOC desk typically wants. There's a credit check, but the decision leans on your equity and your property: Hometap states there are no employment, income, or debt-to-income requirements at all. Eligibility criteria are subject to change, so confirm the current requirement directly with the provider.
Roughly 25% or more. The provider needs enough cushion to protect its position after your existing mortgage. On a $400,000 home with a $300,000 mortgage, you likely won't qualify; with a $150,000 mortgage, you're in good shape.
Your settlement amount goes down with it, because the share is calculated on the home's value at settlement. This is the genuine structural advantage over a loan: an HEI shares your downside, while a HELOC balance stays exactly the same no matter what the market does.
You can settle any time within the term, with no prepayment penalty. Selling the home, refinancing, or paying from savings all work. Because your cost tracks your home's value, settling earlier in a rising market generally costs you less than waiting.
HEIs are offered in a limited and growing set of states — Hometap currently invests in 27 of them, and the list changes as providers expand. State availability is the single most common reason a homeowner can't proceed, so the fastest way to find out is to enter your ZIP code and check rather than rely on any list, including ours.
Anything. There are no restrictions on use. The most common cases we see are wiping out high-interest credit card debt, funding an urgent home repair, covering a medical bill, or rebuilding an emergency fund after a hard stretch.
The initial estimate only asks for your ZIP code and basic details; the credit check comes later, as part of the application and underwriting. Ask the provider what kind of inquiry it runs and at which step before you apply. The investment itself isn't reported as a loan on your credit file, which cuts both ways: it won't raise your utilization or your debt load, and it also won't build positive payment history the way an installment loan would.
See what your equity could unlock
It takes about two minutes, tells you in seconds whether you pre-qualify, and shows you a real number instead of a maybe. If the figure doesn't work for you, you walk away having lost nothing but the two minutes.
Check your estimate with HometapNot a lender and not an offer of credit. Plan My Comeback is paid a commission if you apply through this link. Availability, amount, and terms are determined by Hometap and subject to approval.