The number a homeowner owes at HEI exit is almost never the advance plus a stated interest rate. It’s the investor’s contractual share of either the home’s future value or its appreciation, measured from a starting point the investor discounted at signing. For an $80,000 advance on an $800,000 home that later sells for $975,000, Point’s own worked example puts the payoff around $175,000. That shape holds across the four major providers in 2026, Point, Hometap, Unison and Unlock. But each applies a different formula.
What an HEI buyback formula actually is
A Home Equity Investment, sometimes called a Home Equity Agreement or shared appreciation agreement, isn’t a loan. There’s no interest rate, no monthly payment, no amortization schedule. The homeowner receives a lump sum. The investor records a lien and holds a contractual right to collect at exit.
Exit happens three ways: sale of the home, refinance into a payoff that clears the lien, or the homeowner writing a check to buy the agreement out early. Because the payoff isn’t principal-plus-interest, the size of that check depends on three variables set inside the contract – the starting value assigned to the home, the model used to calculate the investor’s cut, and any cap or floor that trims the extremes. Miss one input, and the estimate can be off by tens of thousands of dollars.
The starting-value discount: the hidden multiplier
Every HEI contract records a starting home value. That figure isn’t the appraisal. Investors apply a risk adjustment, a discount off the appraised value that lowers the baseline from which appreciation or value is later measured. A lower baseline means a larger measured gain at exit. And a larger measured gain means a larger investor payout.
Of the four majors, Point applies the deepest discount, roughly 25% to 30% off the appraisal, according to Point’s own worked examples cited in third-party reviews. Unison applies a lighter 5% adjustment, producing what Unison calls the Original Agreed Value. Hometap doesn’t use a discounted starting value; its formula runs off the final value at exit. Unlock calculates its payoff on the appreciated value at buyback rather than on a starting value at origination.
This single input, buried deep in the schedule of the agreement (usually pages past where most homeowners stop reading), is the most misunderstood cost in the product.
Share of value versus share of appreciation
Point and Unison run share-of-appreciation math. The investor is paid a percentage of the gain above the starting value. If the home doesn’t appreciate above that discounted starting value, the investor’s share of the gain is zero, though the original advance is still repaid.
Hometap and Unlock run share-of-value math. The investor is paid a percentage of the home’s total value at exit, not just the gain. In a flat market, a share-of-value investor still gets paid on the full value. A share-of-appreciation investor doesn’t.
So what happens when you compare raw investor percentages across providers without knowing which model applies? You get misleading conclusions, and usually in the direction that flatters whichever provider looks cheapest on paper.
Side-by-side: the four majors
| Feature | Point | Hometap | Unison | Unlock |
|---|---|---|---|---|
| Model | Share of appreciation | Share of value | Share of appreciation | Share of value |
| Risk adjustment | ~25% to 30% | None | 5% | Uses appreciated value |
| Cap | Annualized Homeowner Protection Cap | 20% IRR cap | Not widely disclosed | Not widely disclosed |
| Loss-sharing | Yes, partial | Yes | Yes | Yes |
| Term | Up to 30 years | 10 years | 30 years | 10 years |
| Partial buyback | No | No | No | Yes |
| Prepayment penalty | No | No | No | No |
On a $500,000 home that appreciates to $600,000, the risk-adjustment gap between Point (about 25%) and Unison (5%) alone can swing the investor payoff by roughly $20,000 to $25,000 on comparable percentage terms, and that’s before any cap or model difference gets involved.
Point buyback formula, worked
Point’s Homeowner Percentage is a stated share of appreciation measured from the discounted starting value. Here’s Point’s public example: an $80,000 advance on an $800,000 home, with the starting home value adjusted to about $584,000 (roughly a 27% discount). Point takes 24% of appreciation. If the home sells at $975,000, appreciation from the adjusted baseline is $391,000. Point’s share is $93,840, rounded in Point’s materials to about $95,000. Total payoff is the original $80,000 plus the appreciation share, roughly $175,000.
Point also applies a Homeowner Protection Cap, an annualized ceiling recomputed each year that limits Point’s return in strong markets. The homeowner pays the lesser of the formula amount or the cap. Read the schedule attached to your Option Agreement rather than rely on a general figure.
But in a flat market where the same home sells at $800,000, appreciation from the adjusted $584,000 baseline is $216,000. Point’s 24% cut is roughly $51,840. Total payoff is about $131,840 on the original $80,000 advance – even though the home didn’t appreciate a dollar above the original appraisal.
Hometap buyback formula, worked
Hometap uses share-of-value math over a fixed 10-year term. The investor percentage is set in the contract and is often described in third-party comparisons as roughly 15% of final value for early exits, rising toward 20% at year 10 on a 10% equity advance. Hometap’s own materials describe pricing case-by-case, so treat the tiered figures as typical, not universal.
The Hometap cap is written as:
Cap = Initial Investment × (1 + 20%)^years
That’s a 20% IRR ceiling. The homeowner pays the lesser of Hometap’s percentage of final value or the cap. On a $50,000 investment held exactly 10 years, the cap is $50,000 × 1.20^10, or roughly $309,600.
Worked example: $50,000 advance on a $500,000 home, 10-year exit at $700,000. If Hometap’s share is 17.5% of final value (an illustrative midpoint), the formula produces $122,500, and the $309,600 cap doesn’t bind. In an aggressive scenario where the same home reaches $2,000,000 at year 10, 17.5% would be $350,000, and the cap governs at $309,600.
Unison buyback formula, worked
Unison uses share-of-appreciation math over a 30-year term. The starting value is the appraisal times 0.95, what Unison calls the Original Agreed Value. Third-party reviews describe a typical structure of roughly four times the percentage of equity advanced. A 10% equity advance produces a share near 40% of appreciation, with a broader range of 35% to 50% cited across contracts. Treat those figures as typical rather than fixed.
Worked example: $50,000 advance on a $500,000 home, Original Agreed Value $475,000, sale at $600,000 in year 8. Appreciation from the baseline is $125,000. At a 40% share, Unison’s cut is $50,000, added to the $50,000 advance, for a payoff near $100,000.
And in a flat market where the same home sells at $475,000, appreciation from the baseline is zero, and Unison collects only the $50,000 advance. Unison also shares losses if the home depreciates below the Original Agreed Value, reducing the payoff below the advance in that scenario.
Unlock buyback formula, worked
Unlock uses share-of-value math over a 10-year term, calculated on the appreciated value at buyback. Its distinguishing feature is a structured partial buyback: homeowners can buy out a portion of Unlock’s position rather than the entire agreement, with a recommended minimum of 25% of the payoff amount per partial. Each partial requires a fresh appraisal paid by the homeowner, plus a processing fee. There’s no prepayment penalty.
Worked example: $75,000 advance on a $500,000 home, Unlock takes 18.75% of value (illustrative). At year 3 the home appraises at $575,000. A full buyout would be 18.75% of $575,000, roughly $107,800. A 25% partial buyback would cost about $27,000 plus appraisal and fee, reducing Unlock’s ongoing share proportionally. At full exit in year 8 with the home at $650,000, the remaining share applies to the year-8 appraisal rather than the year-3 amount.
Caps, floors and depreciation
Caps limit investor upside. Loss-sharing limits homeowner downside. Hometap’s 20% IRR cap is explicit and formulaic. Point’s cap is annualized and set inside each contract. Unison and Unlock rely primarily on the share percentage itself to bound outcomes rather than a stated IRR ceiling.
If a home depreciates, all four providers share some portion of the loss, but treatment varies. Unison’s share of loss can reduce the amount owed below the original advance. Hometap and Point apply the loss to the investor’s share of value or appreciation, respectively.
How to estimate your buyback in six steps
- Find your starting home value from the Option Agreement or comparable schedule.
- Apply the risk adjustment recorded in the contract to that value.
- Determine which model governs your agreement, share of value or share of appreciation.
- Apply the investor percentage to the correct base (final value for share-of-value; gain above the adjusted starting value for share-of-appreciation).
- Check the protection cap or IRR ceiling and take the lesser of the formula result and the cap.
- If the agreement is share-of-appreciation, add the original advance back on top. If share-of-value, the percentage already covers the payoff.
Funding a buyback
Most homeowners fund an early buyback one of three ways: sale proceeds, a cash-out refinance that clears the HEI lien at closing, or a HELOC or fixed-rate HELOAN drawn against remaining equity. Anyone stacking a HELOC over a first mortgage to buy out an HEI should confirm the combined loan-to-value limit the lender enforces before applying, since the HEI lien counts toward CLTV in most underwriting. For a direct comparison of the underlying product, see our home equity sharing agreement vs. HELOC breakdown.
2026 regulatory context
On January 15, 2025, the CFPB filed an amicus brief in Roberts v. Unlock Partnership Solutions AOI, Inc. arguing that home equity contracts are residential mortgage loans under the Truth in Lending Act. On the same day, the Bureau published a consumer advisory and an issue spotlight reporting that the top four HEI providers securitized roughly $1.1 billion across about 11,000 contracts in the first 10 months of 2024.
Maryland’s shared-appreciation-agreement rules took effect November 25, 2024. Illinois proposed rules under the Residential Mortgage License Act on August 15, 2025. The National Consumer Law Center published a May 2025 issue brief characterizing HEIs as subprime mortgages. Federal posture beyond January 2025, and the status of Roberts v. Unlock, should be verified at the time of any transaction.
Questions to ask before you sign or exit
For a new offer, walk in with six questions: what’s the starting home value in dollars after the risk adjustment, which model governs the payoff (share of value or share of appreciation), what percentage does the investor take, what cap or floor applies, what’s the term, and what fees attach to buyback. Any provider that can’t answer those in plain language on a first call is telling you something.
For an existing HEI approaching term, the questions shift: what does the current formula produce at today’s appraisal, what does it produce at 5% and 10% higher, what would a cash-out refinance or HELOAN cost to clear the lien, and is a partial buyback contractually available.
FAQ
What is a risk adjustment on an HEI?
A risk adjustment is a discount investors apply to the home’s appraised value at origination, producing a lower baseline (the starting home value) from which the investor’s share of value or appreciation is later calculated. Point’s discount runs roughly 25% to 30%. Unison’s is 5%. A larger discount produces a larger investor payoff at exit.
How does Hometap’s 20% cap work?
Hometap’s cap formula is: Cap = Initial Investment × (1 + 20%)^years. The homeowner pays the lesser of Hometap’s contracted percentage of final value or that capped amount. On $50,000 held 10 years, the cap is roughly $309,600.
Can I do a partial buyback of my Unlock HEI?
Yes. Unlock allows homeowners to buy out a portion of the position, with a recommended minimum of 25% of the payoff per partial. Each partial requires a new appraisal paid by the homeowner plus a processing fee.
Do HEIs have prepayment penalties?
None of the four major providers charge a prepayment penalty. But Unlock does charge appraisal and processing fees on partial buybacks.
What happens at the end of a 10-year HEI term if I have not sold?
Hometap and Unlock terms end at 10 years, at which point the homeowner must exit through sale, refinance or cash buyback. Point and Unison run up to 30 years, giving more runway.
Are HEIs regulated as mortgages by the CFPB?
The CFPB’s January 2025 amicus brief argues that HEIs are residential mortgage loans under TILA, but the courts haven’t settled the question and provider disclosures generally treat them as investments rather than loans. Verify current federal and state status before signing.
Bottom line
The math isn’t the interest rate. It’s the risk adjustment, the model, the investor percentage, the cap and the term, in that order of impact. Two contracts with identical stated percentages can produce payoffs tens of thousands of dollars apart because the starting values were set differently at signing. So read the schedule attached to the Option Agreement, twice if you have to, before the numbers start moving on you. Run your own arithmetic before you sign, and again before you exit – not after the payoff quote lands in your inbox, when you’ve already lost the leverage to renegotiate anything.
This article is educational and does not constitute financial, legal or tax advice. HEI tax treatment is unsettled and fact-specific; confirm with a CPA before treating any part of a buyback as deductible mortgage interest. Last updated July 2026.
