Home equity sharing lets you tap into your home’s value without adding monthly payments.
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 who are comfortable settling within 10 years. Under its current pricing structure, homeowners who settle within the first five years receive the lower Tier 1 multiplier. Those who settle after year five receive the higher Tier 2 multiplier. The 10-year timeline is important. If you’re not ready to sell, refinance or use other funds to settle by then, you may be forced to sell your home. This 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. Its current pricing model has two tiers: if Hometap invests 10% of your home’s value, its settlement share would be 16.5% if you settle within the first five years, or 18% if you settle after year five, subject to the Hometap Cap. Point offers a longer term of up to 30 years, which gives homeowners more time to sell, refinance or otherwise settle the agreement.
- Valuation method. Hometap uses third-party appraisals or valuations to determine your home’s value at settlement. In general, Hometap’s share is based on the home’s full market value at that time, though qualifying renovation-related value increases may be excluded through a renovation adjustment. Point also uses standard appraisal practices, but its structure is different: Point shares in the change in value of your home beginning from its Risk-Adjusted Starting Value, which is typically a discount to the home’s appraised value. Other HEI models may account for risk differently, such as through an exchange rate that applies to the home’s full value.
- Underwriting guidelines. Hometap allows homeowners to access up to 27% of their home’s value, with a maximum investment of $600,000. For example, if your home is valued at about $2.22 million, the 27% cap would equal roughly $600,000. Point requires you to maintain at least 27% equity based on your home’s appraised value, with a maximum investment of $600,000.
- Renovations. Hometap lets you exclude the added value from qualifying, documented home improvements from your final settlement calculation, which can lower your cost if you upgrade your home. Point handles renovations differently: added value from improvements may still be reflected in the home’s appraised value at settlement, meaning you could share in appreciation created by improvements you paid for.
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 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.
Under Hometap’s current pricing structure, your settlement percentage is based on one of two tiers:
Tier 1: Settle within the first five years. Hometap applies a 1.65x multiplier to its original investment percentage.
Tier 2: Settle after year five. Hometap applies a 1.80x multiplier to its original investment percentage.
For example, if Hometap invests 10% of your home’s value, its settlement share would be 16.5% if you settle within the first five years, or 18% if you settle after year five, subject to the Hometap Cap.
I think of these agreements as a different form of financing cost. Instead of paying monthly interest as you would with a traditional home equity loan, you give up a larger percentage of your home’s future value when you settle. If your home appreciates, the dollar amount owed increases. If your home appreciates less, the dollar amount owed is lower.
The Hometap Cap sets a maximum return of 18.5% per year, compounded monthly (or lower if required by applicable state law). That cap can limit what you owe in higher-cost scenarios, especially if you settle early or your home appreciates quickly.
Hometap lets you exclude value added by qualifying, documented home improvements from the settlement calculation.
Hometap Pros:
- Pricing tiers are easier to understand than some HEI models.
- Lower multiple if your exit within five years
- Value added through qualifying, documented home improvements may be excluded.
Hometap Cons:
- Must be settled by the end of the 10-year term, potentially forcing a sale if you’re unprepared.
- The cost is tied to your home’s future value, so strong appreciation can increase the amount owed.
- Short-term settlements can still be expensive, though the Hometap Cap limits the maximum return.
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.
Point Review Video Summary
Prefer to watch instead of read? In this video, I share my full review of Point — including how it works, real-life examples, and when a home equity investment could make sense.
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 are comfortable with a 10-year settlement deadline.
- You prefer a simpler two-tier pricing structure.
- You plan to make qualifying home improvements and want the added value excluded from the settlement calculation.
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.
