On this page 7 sections
In short
- The trade: an HEI gives you cash now for a share of your home's value later, repaid in one lump sum.
- The cost: there's no interest rate, but many contracts cap what you can owe at a yearly rate, and early on the cap is often the number that applies.
- The window: the first few years are when the payoff tends to grow fastest. That's when comparing options matters most.
- The exit: most contracts let you settle before the term ends, usually by selling or refinancing. Some restrict early repayment, so check yours.
HELOCFacts is not affiliated with or endorsed by Point, Splitero, Hometap, Unlock or Unison. Company names are used only to describe how their contracts are structured.
Companies use different names for the same idea: home equity investment, home equity agreement, home equity contract or equity sharing agreement.
How an HEI payoff is calculated
Contracts come in two styles:
- Investment plus a share of the change. You repay what you received, plus a share of how much your home's value changed. Point and Unison describe their contracts this way.
- A share of the total value. You repay an agreed percentage of your home's value when you settle. Hometap and Unlock describe their contracts this way.
Either way, three terms in your agreement decide the number: the starting value, the investor's share and the cap.
Many contracts measure appreciation from a starting value set below your appraisal. Some companies call this discount a risk adjustment. Because the starting value is lower, part of your home's current value counts as appreciation from day one, even if prices never move.
Why early payoffs grow fast
The cap is a maximum on what you owe, stated as a yearly rate. When the share formula would produce more than the cap allows, you owe the cap amount instead. In the early years that's common, because of the starting-value gap.
The Consumer Financial Protection Bureau's January 2025 review of these contracts found that, under many contracts, the amount owed grows 19.5% to 22% a year in the early years, with caps of roughly 18% to 20% compounded monthly. The CFPB also noted that caps work like a maximum interest rate on the money you received.
Here's a hypothetical example, assuming:
- $90,000 received on a home appraised at $600,000
- a $438,000 starting value
- a 45% share of the change in value
- a 19% yearly cap, compounded monthly
- a home value that stays flat
| Time since funding | Estimated payoff | What sets it |
|---|---|---|
| 6 months | $98,896 | The cap |
| 1 year | $108,671 | The cap |
| 2 years | $131,214 | The cap |
| 3 years | $158,435 | The cap |
| About 3 years, 2 months onward | $162,900 | The share formula |
Run your own numbers in the HEI payoff calculator, or see how an HEI compares with a HELOC.
Three ways to settle or buy out an HEI
- Sell the home. The payoff comes out of the sale proceeds at closing.
- Refinance. A HELOC, home equity loan or cash-out refinance pays the HEI company at closing. You'll need enough equity after the payoff, and you'll take on a monthly payment.
- Pay from savings. Usually in one lump sum. Unlock also allows partial buyouts, each with an appraisal and a fee.
When keeping it may be the right call
- You can't comfortably carry a monthly payment. An HEI has none; a HELOC does.
- You plan to sell within a year or two. Settling at the sale avoids a second set of closing costs.
- The share formula, not the cap, now sets your payoff, and your home's value is flat, so the payoff has stopped growing.
What a lender needs to pay off an HEI
A written payoff statement from the HEI company, which usually requires a current valuation of the home. The new loan has to cover your first mortgage plus the payoff within the lender's combined loan-to-value limit. Some lenders don't close loans that pay off an HEI at all, so ask before you apply.
For lawsuits, settlements and the states that regulate these contracts, see HEI lawsuits and state laws.
Have your payoff estimate?
A licensed loan officer can compare it with HELOC and home equity loan options, including whether you'd have enough equity after the payoff.
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Frequently asked questions
Is an HEI a loan?
HEI companies describe them as investments, not loans. In January 2025, the CFPB argued in a federal court brief that one company's contract is a residential mortgage loan under the Truth in Lending Act. The question is unsettled.
Can I pay off an HEI early?
Usually. Point, Hometap, Unlock and Unison say you can settle at any time during the term. The CFPB found some companies restrict repayment early in the term, so check your agreement.
Will I owe more than I received?
Often, yes. If your home falls below the starting value, contracts that share in the change, such as Point's and Unison's, also share the loss, so you could owe less.
What is an HEI buyout?
Settling the contract before the term ends without selling the home, usually by paying the full amount from savings or a refinance. Companies may call it a buyout, buyback or owner repurchase.
How do I get my exact payoff?
Request a payoff statement from your HEI company. Then compare it with a HELOC or home equity loan quote.
Questions about your own situation? Contact a licensed loan officer. It's optional, and your information is not sold to lead marketplaces.