Home Equity Sharing Agreements Explained

Home equity sharing agreements (also called home equity investments or shared appreciation agreements) have exploded in popularity since 2020. Companies like Point, Unison, Hometap, and Unlock promise cash from your home's equity without monthly payments or interest charges.

Sounds perfect, right? Access $50,000-$300,000, no monthly payment, stay in your home. What's the catch?

The catch is significant: you're selling a percentage of your home's future appreciation—and that can cost you far more than a traditional loan. But in the right situation, equity sharing can make sense.

This guide breaks down exactly how these agreements work, what they really cost, and whether you should consider one.

What Is a Home Equity Sharing Agreement?

A home equity sharing agreement (HESA) is a contract where an investment company gives you a lump sum of cash in exchange for a percentage of your home's future value when you sell or at a specified term end.

Here's how it works:

1. You own a home worth $500,000 with $200,000 in equity
2. An investment company offers you $50,000 cash
3. In exchange, they get 20% of your home's future appreciation (or depreciation)
4. No monthly payments required
5. When you sell (or after 10-30 years), you pay back the original amount PLUS their share of appreciation

Real example:

• Today: Home worth $500,000, you get $50,000 cash, company gets 20% appreciation share
• 10 years later: Home worth $750,000
• Appreciation: $250,000
• Company's share: $50,000 (original) + $50,000 (20% of $250K appreciation) = $100,000 total
• Effective cost: $50,000 over 10 years for the $50,000 you received (100% return = ~7.2% annual cost)

Compare that to a HELOC at 9% over 10 years with payments: ~$45,000 in interest on $50,000 borrowed.

At first glance, similar cost. But the differences matter significantly.

How Equity Sharing Differs from Traditional Loans

Traditional Home Equity Loan or HELOC:

• Debt (appears on credit report)
• Fixed interest rate or variable rate
• Monthly payments required
• Payoff amount known upfront
• Interest is tax-deductible if used for home improvements
• Doesn't reduce your ownership stake
• Lender can't profit from appreciation

Home Equity Sharing Agreement:

• Investment (not a loan, doesn't appear as debt on credit report)
• No interest rate—company shares in appreciation
• No monthly payments
• Payoff amount unknown (depends on future home value)
• Not tax-deductible as interest
• Reduces your ownership percentage
• Company profits when your home value increases

The key difference: With a loan, you pay a fixed cost (interest). With equity sharing, you pay a variable cost (percentage of appreciation). If your home value skyrockets, equity sharing becomes very expensive.

Major Home Equity Sharing Companies (2026 Overview)

Point (nowpoint.com)

• Investment range: $25,000-$500,000
• Equity share: 15-35% of appreciation
• Term: 10 years (can extend to 30)
• Geographic coverage: Most major metro areas
• Credit requirement: 500+ credit score accepted
• Unique feature: Allows buyout anytime; share percentage varies based on risk

Example Point scenario:

• $80,000 received
• 25% appreciation share
• Home appreciates from $600K to $850K over 10 years
• Your payback: $80,000 + $62,500 (25% of $250K gain) = $142,500

Unison (unison.com)

• Investment range: $25,000-$500,000
• Equity share: 30-50% of appreciation/depreciation
• Term: 30 years
• Geographic coverage: 26 states
• Credit requirement: 620+ typically
• Unique feature: They also share in depreciation (if your home drops in value, you owe less)

Example Unison scenario:

• $100,000 received
• 40% appreciation/depreciation share
• Home appreciates from $500K to $700K over 15 years
• Your payback: $100,000 + $80,000 (40% of $200K gain) = $180,000

Hometap (hometap.com)

• Investment range: $15,000-$600,000
• Equity share: Based on "investment percentage" (typically 8-17% of home value)
• Term: 10 years
• Geographic coverage: 14 states
• Credit requirement: 600+
• Unique feature: Doesn't consider credit score heavily; focuses on equity position

Example Hometap scenario:

• $75,000 received on $500K home (15% investment)
• At maturity: You owe back 15% of current home value
• Home worth $650K after 10 years
• Your payback: $97,500 (15% of $650K)

Unlock Technologies (unlock.com)

• Investment range: $25,000-$500,000
• Equity share: Varies by market and term
• Term: 10-30 years
• Geographic coverage: Growing coverage in major metros
• Credit requirement: Flexible
• Unique feature: Offers senior-specific products (retirement income)

The True Cost: Running the Numbers

Let's compare equity sharing to alternatives across different scenarios:

Scenario 1: Strong Market Appreciation (5% annually)

Starting point: $400,000 home, need $60,000

Option A: Home Equity Sharing (Point)

• Receive: $60,000
• Share: 25% appreciation
• After 10 years home worth: $652,000 (5% annual appreciation)
• Appreciation: $252,000
• Payback: $60,000 + $63,000 (25% of appreciation) = $123,000
• Effective annual cost: 7.4%

Option B: Home Equity Loan at 9%

• Borrow: $60,000
• Monthly payment: $760 for 10 years
• Total paid: $91,200
• Effective annual cost: 9%

Option C: HELOC at 9.5% (interest-only for 5 years, then pay off)

• Borrow: $60,000
• Interest-only payments years 1-5: $475/month
• Principal + interest years 6-10: $1,025/month
• Total paid: $90,000
• Effective annual cost: 9.5%

Winner in strong appreciation market: Home equity loan or HELOC (cheaper than equity sharing when values rise significantly)

Scenario 2: Moderate Appreciation (2% annually)

Starting point: $400,000 home, need $60,000

Option A: Home Equity Sharing

• After 10 years home worth: $487,000
• Appreciation: $87,000
• Payback: $60,000 + $21,750 (25% of appreciation) = $81,750
• Effective annual cost: 3.1%

Option B: Home Equity Loan at 9%

• Total paid: $91,200

Option C: HELOC at 9.5%

• Total paid: $90,000

Winner in moderate appreciation: Home equity sharing (significantly cheaper)

Scenario 3: Flat or Declining Market

Starting point: $400,000 home, need $60,000

Option A: Home Equity Sharing (Unison, shares depreciation)

• After 10 years home worth: $380,000 (5% decline)
• Depreciation: -$20,000
• Payback: $60,000 - $8,000 (40% of depreciation) = $52,000
• Effective annual cost: NEGATIVE 1.4% (you saved money!)

Option B: Home Equity Loan

• Total paid: $91,200 (regardless of home value)

Option C: HELOC

• Total paid: $90,000 (regardless of home value)

Winner in declining market: Home equity sharing that includes depreciation sharing (you pay less if home value drops)

When Home Equity Sharing Makes Sense

Equity sharing isn't right for most people, but it works well in specific situations:

1. Poor Credit or High Debt-to-Income Ratio

If you can't qualify for traditional financing:

• Credit score under 620
• DTI above 43%
• Self-employed with inconsistent income documentation
• Recent bankruptcy or foreclosure

Equity sharing companies care more about your home's value and equity than your credit score.

2. Need to Avoid Monthly Payments

If your cash flow is tight but you need a lump sum:

• Starting a business (need capital, uncertain income)
• Medical emergency (one-time large expense)
• Between jobs but need cash (can't afford monthly payments)

Warning: Not having monthly payments is psychologically easier but can be financially costlier long-term.

3. Expecting Flat or Declining Home Values

If you believe your local market will stay flat or decline:

• Rust Belt cities with population decline
• Markets that just experienced huge run-ups (2021-2022) and are correcting
• Local economic downturn (major employer leaving)

In this case, sharing appreciation is cheap because there's little to share.

4. Short-Term Needs with Near-Term Sale Plans

If you're planning to sell within 2-5 years anyway:

• Downsizing once kids leave home
• Relocating for retirement
• Temporary residence

You'll pay back the equity share soon, and the lack of monthly payments improves cash flow until sale.

5. Senior Homeowners Needing Retirement Income

Some equity sharing products target retirees:

• Don't want monthly loan payments eating into fixed income
• Plan to age in place for 10-20+ years
• Want to access equity without selling

This is essentially a reverse mortgage alternative, but often with better terms.

When to Avoid Home Equity Sharing

1. Strong Local Market Appreciation Expected

If your area is experiencing:

• Major corporate relocations bringing jobs
• New transit infrastructure
• Limited housing supply with high demand

You'll pay dearly for that appreciation. A 7% annual appreciation over 10 years could mean paying back 2x-3x what you received.

2. You Qualify for Traditional Financing

If you have:

• 680+ credit score
• Stable income
• DTI under 43%

You'll get better rates with a HELOC or home equity loan (8-10% vs. effective 5-10%+ with equity sharing).

3. You Can Make Monthly Payments

Monthly payments force discipline. Without them, it's easy to forget you owe a huge balloon payment eventually.

4. You're Not Sure How Long You'll Stay

Equity sharing typically has 10-30 year terms. If you sell earlier, you trigger the payback. If you're uncertain about staying, the flexibility of a HELOC (pay it off anytime) is better.

5. You Need Tax-Deductible Interest

Interest on home equity loans/HELOCs is tax-deductible if used for home improvements. Equity sharing payments are NOT deductible.

Hidden Costs and Gotchas

Origination Fees

Most equity sharing companies charge 3-5% origination fees:

• $60,000 investment → $1,800-$3,000 in fees
• Often rolled into the amount you "receive," so you actually get $57,000-$58,000

Appreciation Cap Floors

Some agreements have minimum appreciation sharing:

• "We get 25% of appreciation OR $X, whichever is greater"
• Protects the company even if appreciation is minimal

Buyout Penalties

Want to pay off early? Some companies charge:

• Prepayment penalties (1-3% of payback amount)
• Early termination fees
• Minimum holding periods (can't buy out in first 2-3 years)

Home Maintenance Requirements

Equity sharing agreements often require:

• Maintaining homeowner's insurance
• Paying property taxes on time
• Keeping property in good condition
• Approval for major renovations

Failure to comply can trigger default and forced buyout.

Limited Geographic Availability

Not available in all states or markets. As of 2026:

• Most active: CA, CO, FL, TX, WA major metros
• Limited/unavailable: Rural areas, small cities, some states entirely

Market Value Disputes at Payback

When you sell or the term ends, the home must be valued:

• Who chooses the appraiser?
• What if you disagree with the appraisal?
• Can the company force a sale if you can't refinance to buy them out?

Read the fine print on dispute resolution.

Real-World Example: Is It Worth It?

Meet Sarah, 58, in Denver:

Situation:

• Home worth: $550,000
• Mortgage: $180,000
• Equity: $370,000
• Needs: $80,000 for daughter's medical bills
• Income: $65,000/year (fixed, approaching retirement)
• Credit score: 590 (medical debt impacted credit)

Options:

Option 1: Home Equity Loan

• Can't qualify (credit score too low)

Option 2: Personal Loan

• $80,000 at 18% over 7 years
• Monthly payment: $1,685
• Total paid: $141,500
• Can't afford monthly payment anyway

Option 3: Home Equity Sharing (Point)

• Receive: $80,000 (minus $3,200 fee = $76,800 net)
• Give up: 28% of appreciation
• No monthly payment
• Plans to sell in 8 years when downsizing

Outcome after 8 years:

• Home worth: $685,000 (3% annual appreciation)
• Appreciation: $135,000
• Payback: $80,000 + $37,800 (28% of appreciation) = $117,800
• Effective cost: $37,800 over 8 years

Sarah's verdict: "The equity sharing was my only realistic option. I couldn't afford monthly payments on my income, and personal loans were way too expensive. Yes, I gave up some appreciation, but I got my daughter the care she needed, stayed in my home, and I'm still coming out ahead when I sell."

Alternatives to Consider First

Before signing an equity sharing agreement, explore:

1. HELOC or Home Equity Loan

If you qualify (620+ credit, stable income), rates are 8-10% as of early 2026. Monthly payments required, but total cost is usually lower.

2. Cash-Out Refinance

If rates have dropped since your original mortgage, refinance and pull out cash. You get one lower payment instead of mortgage + separate loan.

3. Reverse Mortgage (Age 62+)

For seniors, FHA reverse mortgages allow you to access equity without monthly payments. More regulated than equity sharing, and you maintain full ownership.

4. Delay the Expense

Can you wait 1-2 years and save up? Or finance the expense directly (medical payment plans, 0% credit card promos for home improvements)?

5. Sell and Downsize

If you need a large amount of cash, selling and moving to a smaller home may net you more cash than equity sharing, with no future appreciation lost.

How to Evaluate an Equity Sharing Offer

If you're considering an offer, ask:

1. What's my exact equity share percentage? Get it in writing. "15-35%" is too vague.

2. What's the total cost in different scenarios? Model 2%, 4%, and 6% annual appreciation. What do you owe back in each case?

3. Can I buy out early? At what cost? Check for prepayment penalties or minimum hold periods.

4. Who chooses the appraiser at maturity? Ensure it's neutral third party, not company-selected.

5. What if I can't pay back at maturity? Do I have to sell? Can I refinance? What are my options?

6. Are there depreciation sharing clauses? If values drop, does my payback decrease?

7. What are ongoing obligations? Maintenance requirements, insurance, tax payment deadlines?

8. What triggers default? Missed property taxes? Failure to insure? Understand the risks.

9. What are the fees? Origination, appraisal, legal, servicing fees. Get total cost breakdown.

10. Can I get this reviewed by an attorney? Spend $500-1,000 for a real estate attorney to review before signing. Worth every penny.

The Bottom Line

Home equity sharing agreements are a legitimate financial tool, but they're expensive if your home appreciates significantly. They work best for people who:

• Can't qualify for traditional financing
• Can't afford monthly payments
• Expect flat or modest appreciation
• Need short-term access to equity
• Have unique situations (self-employed, retirees, medical emergencies)

They're generally a bad deal for people who:

• Qualify for traditional loans (HELOCs, home equity loans are usually cheaper)
• Live in high-appreciation markets
• Plan to stay long-term in a growing area
• Can afford monthly payments

Before signing, model the costs under different appreciation scenarios, compare to alternatives, and have an attorney review the agreement.

Your home's equity is likely your largest asset. Giving up 20-40% of its future appreciation is a big decision—make sure the math works in your favor.

Related Articles

• [Home Equity Explained: What It Is and How to Build It](/blog/home-equity-explained)
• Blended Family Home Planning: Merging Households and Managing Home Equity
• Bonus Depreciation