Home equity sharing lets you tap into your home’s value without taking on new debt.
Unlike a traditional HELOC or home equity loan, there are no monthly payments or interest charges with equity sharing. Instead, you share a portion of your home’s future value.
Two leading providers — Hometap and Point — offer different approaches. This review breaks down key differences so you can decide which one is best for you.
Key Takeaways
- Hometap is best for homeowners seeking a short-term arrangement. It offers better terms if you exit within the first 3 years, as Hometap’s share increases the longer you hold the investment. However, you must settle the contract within 10 years. If you’re not ready to sell or refinance by then, you may be forced to sell your home to pay off the investment. This 10-year timeline is very different from Point, which offers up to 30 years to settle.
- Point is best for homeowners who want long-term flexibility, as their investments last 30-years. It’s a better fit if you don’t have a clear plan to sell or refinance, as you can settle any time within that 30-year period without prepayment penalties.
Key Differences Worth Highlighting
- Term length. Hometap requires settlement by the end of its 10‑year term and uses a tiered pricing model that increases the percentage you owe the longer you hold the investment. For instance, if you take out cash equal to 10% of your home’s value, you might owe 15% if you exit within 0-3 years, roughly 17.8% for a 4-6-year exit, and 20% if you hold for 7-10 years. In contrast, Point always uses the ending value when calculating the repayment upon exit.
- Valuation method. Hometap uses standard appraisals, so you share the full market appreciation of your home. For instance, if your $500,000 home increases in value to $600,000, that means you would share $600,000. Point also uses standard appraisal practices in valuing your property. Unlike Hometap, Point only shares in the change in value of your home, beginning from the Risk Adjusted Starting Value – typically a discount of 27% to the market value of the home. From that starting point, Point will share its percentage of the appreciation or depreciation. Other models may account for this risk differently, such as through an exchange rate mechanic accounting for the entire value of the home.
- Underwriting guidelines. Hometap requires that you retain at least 25% equity in your home after receiving an investment, meaning the maximum investment is capped at 25% of your home’s value. For example, if your home is valued at $2.4 million, you could receive up to $600,000. In contrast, Point requires you to maintain at least 27% equity based on your home’s appraised value, with a maximum investment of $500,000.
- Renovations. Hometap lets you exclude the added value from documented home improvements from your final repayment, lowering your cost if you upgrade your home. With Point, any added value from improvements is fully factored into your repayment—meaning you’re effectively shouldering 100% of the cost increase due to renovations, while still sharing in the upside.
Understanding How Each Company Works
To best understand how Hometap and Point operate, it’s helpful to break down the cost estimates provided on their websites. These examples illustrate key factors such as term length, valuation methods, fees and renovation adjustments.
Keep in mind that actual contract terms vary based on your credit profile and other personal factors, and you only see your final offer after starting the underwriting process. So, while these estimates provide a useful starting point, the true comparison comes from reviewing your personalized offer.
That said, knowing how home equity sharing contracts are structured upfront can help you decide which option aligns best with your financial needs. For instance, if you’re looking for long-term flexibility, Hometap might not be the best fit. If both options meet your criteria, consider applying to both and comparing the offers.
How Hometap Works
Hometap provides a lump sum in exchange for a fixed percentage of your home’s future value. There are no monthly payments, and you settle the investment by selling, refinancing or buying out the agreement at or before the end of its 10-year term.
The example pictured above assumes you have a $500,000 home and receive a $50,000 cash advance for a 5-year term at an annual appreciation rate on your home of 4.34%. After 5 years, your home’s estimated value would be $618,353, and you’d owe roughly $109,957 — leaving you with $508,396 in remaining equity.
Hometap’s tiered model sets your repayment percentage based on the term and the amount of your home’s value you receive upfront. For example, in a scenario where you receive 10% of your home’s value in cash, you might repay:
- 15% of your home’s future value if you exit within 0-3 years
- 17.8% for a 4-6-year term
- 20% if you hold the investment for 7-10 years.
These percentages can vary depending on your credit profile and how much equity you tap. (I.e., they’re not fixed for every scenario where you take out 10%.)
I like to think of these agreements as a different form of “interest.” Instead of paying monthly interest as with a traditional home equity loan, you’re essentially surrendering an increasing percentage of your home’s future value the longer you hold the agreement. Plus, any appreciation in your home’s value is also shared — effectively acting as additional interest.
For instance, if your cash advance represents 10% of your home’s value, repaying within 3 years might mean you owe 15% of its future value. That’s about 50% more than the amount of advance, for an effective annual rate of roughly 14.5%.
If you hold for the full duration of the 10-year term, you’d owe 20% of the home’s future value, which is double the amount of your advance. But spread over a longer period, the effective annual rate drops to around 7.2%.
Keep in mind, these figures are before fees and ignore additional appreciation. The percentage owed is applied to your home’s future value, so higher appreciation increases your repayment, while modest appreciation or depreciation lowers it.
Hometap Pros:
- More predictable, fixed share of future value.
- Lower percentage if you exit early (best within 0-3 years).
- Value added through home improvements is excluded.
Hometap Cons:
- Must be settled by the end of the 10-year term, potentially forcing a sale if you’re unprepared.
- Cost increases the longer you hold the investment.
See our in-depth Hometap review for more examples and information.
How Point Works
Point provides a lump sum in exchange for sharing in the gain above a risk-adjusted baseline, rather than the entire future value of your home.
With no monthly payments and a flexible term of up to 30 years, you can settle the agreement by selling, buying out the investment using another source of funds or refinancing at your convenience.
The example above illustrates a $500,000 home that receives a $50,000 cash advance for a 5-year term with an annual appreciation rate of 3.5%.
This scenario is similar to the Hometap example, but it’s not an exact apples-to-apples comparison, but is meant to illustrate how the contract works.
In this scenario, the future sale price is estimated at $593,800.
One of the key differences with Point is how they determine what you owe.
Point only shares in appreciation above the risk-adjusted baseline—not the home’s entire future value like Hometap.
For example, if your home is originally appraised at $500,000, Point might set a baseline around $420,000. They then calculate your repayment based only on the increase in value above that baseline, not the full market appreciation.
On the surface, it might seem like you’re giving up a larger slice of your home’s value with Point compared to Hometap. But in reality, Point only takes a share of the increase above a lower, risk-adjusted baseline. This means you’re only sharing the extra gains — not the full market value — which can work in your favor.
Point Pros:
- Offers a flexible term of up to 30 years, giving you more time to decide when to settle.
- No prepayment penalties — repay whenever it suits your financial plan.
- Uses a risk-adjusted baseline that can protect your initial equity if home values decline.
Point Cons:
- No renovation adjustments
- The maximum cash upfront is lower than with Hometap.
- The model is more complex, making it harder to predict final costs.
See our in-depth Point review for more examples and information.
Which Option Is Right for You?
Point and Hometap are among the leading home equity sharing providers in the market today. The key factors that separate these two companies hinge on your timeline for selling or refinancing, your plans for home improvements, and the flexibility you require.
Here’s how it breaks down:
Choose Hometap if…
- You plan to sell or refinance within a short to medium term (ideally within three years).
- You plan to make home improvements and want that added value excluded from your repayment.
Choose Point if…
- You need long-term flexibility (up to 30 years).
- You do not have immediate plans to sell or refinance your home.
Keep in mind that your personalized offer only becomes available once you begin underwriting with each company.
While this review compares their standard terms, your final numbers may vary. If both options initially seem like a fit, consider applying to both so you can accurately compare your unique offers and choose the best option for your financial situation.
