The short answer
A home equity agreement (HEA) is a contract where a company pays you a lump sum today in exchange for a share of your home's value when you settle. You make no monthly payments and pay no interest. You settle in one payment when you sell, refinance, or reach the end of the term.
A home equity investment (HEI), a home equity agreement (HEA), and a shared equity agreement are mostly different names for the same kind of product: cash now, no monthly payments, and a share of your home's value later.
What actually changes your cost is the structure: whether the provider takes a share of your home's gain or its whole value, the multiplier, the starting value, the cost cap, and the term.
What each provider calls it
And how each one actually works.
| Provider | What they call it | How you repay |
|---|---|---|
| Point | Home Equity Investment (HEI) | Share of your home's gain, measured from a starting value set below your appraisal |
| Hometap | Home Equity Investment | Share of your home's total value at settlement |
| Unlock | Home Equity Agreement (HEA) | Share of your home's future value, set with an exchange rate |
| Unison | Equity Sharing Agreement | Share of your home's change in value, up or down |
| Splitero | Home Equity Investment (an option purchase agreement) | Share of your home's future value (the Split Percentage) |
| CHEIFS | Home equity investment agreement | Share of your home's future value, up to 2.25× the share you received |
Home equity agreement companies
The six major providers, whatever they call it, on the same numbers: $100,000 against a $750,000 home with a $300,000 mortgage, 4% yearly growth, settled after 7 years.
| Provider | Typical cost | Cost cap | Term | States |
|---|---|---|---|---|
| Point | 14.3% a year | 18% a year | Up to 30 years | 32 |
| Hometap | 14.1% a year | 18.5% a year, compounded monthly | 10 years | 27 |
| Unlock | 15.9% a year | 19.9% a year | 10 years | 26 |
| Unison | 14.7% a year | None published | Up to 30 years | 23 |
| Splitero | 15.9% a year | 17.99% a year, compounded monthly | 10 to 30 years (matches your mortgage) | 17 |
| CHEIFS | 13.7% a year | 12.99% a year or 14.99%, by program | No scheduled end date | 22 |
Typical cost is the effective annual cost from each provider's published terms.
Yearly cost is measured on the cash you actually receive, after the provider's fee and about $1,500 of closing costs. Measured on the full investment instead, it's lower: in our standard example ($100,000 on a $750,000 home, 4% yearly growth, 7 years), Hometap is 13.1% a year instead of 14.1%.
Why the names differ
Each provider picked its own label. "Investment" emphasizes that the company is buying a stake in your home, not lending you money. "Agreement" emphasizes the contract. Regulators often use a broader term, home equity contract, to cover all of them.
The differences that matter
- Share of gain vs share of value. Some providers take a share of how much your home gains; others take a share of its whole value at settlement. Share-of-value agreements cost you money even if your home doesn't appreciate.
- The multiplier. Your share is usually a multiple of what you received: 1.65 to 2 times for share-of-value providers, and 2.4 to 4 times for share-of-gain providers, in published examples.
- The starting value. Share-of-gain providers may measure gain from a value set below your appraisal, from 5% to 27% below in published terms.
- The cost cap. Published caps range from about 13% to 20% a year, and some providers publish none.
- The term. Some agreements must be settled within 10 years; others allow up to 30.
Because of these differences, the same cash can cost very different amounts. In our standard example ($100,000 against a $750,000 home with a $300,000 mortgage, 4% growth, 7 years), costs range from 13.7% to 15.9% a year across the providers we can model. See them side by side.
Other names you'll see
Shared appreciation agreement, home equity sharing agreement, equity sharing agreement, and home equity contract all describe the same family of products. When you're comparing offers, ignore the label and compare the effective annual cost.
Questions
Is a home equity agreement (HEA) a loan?
Providers structure HEAs and HEIs as an investment in your home rather than a loan: there's no interest and no monthly payment. But several states, including Illinois, Maryland, and Connecticut, now regulate these agreements as mortgage loans.
Which companies offer home equity agreements?
The six major providers are Point, Hometap, Unlock, Unison, Splitero, and CHEIFS. Only Unlock calls its product a home equity agreement; the others use home equity investment or equity sharing agreement. Compare them in the table above.
Is Unison's equity sharing agreement an HEI?
Yes, in everything but name. Unison shares in your home's change in value, up or down, in exchange for cash now, just like other home equity investments.
What is a home equity contract?
It's the umbrella term regulators use for home equity investments, home equity agreements, and shared equity agreements.
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