With you for the ups and downs
We share in the change in value of your home over your HESA’s term. If your home loses value, we’ll absorb some of that depreciation. We’re your home equity partner, not a lender.
Wait, no interest rates?
That’s right! Our HESA isn’t debt, so there’s no interest rate. Your payment at the end of your HESA is based on the amount of equity you tapped into originally plus (or minus) our share of the appreciation (or depreciation) of your home since then.
If your home appreciates…
We share in the upside, so your payment will be higher the more your home increases in value.
If your home depreciates…
We’ll share in the downside if you sell after the first 5 years, so your payment to us could be less than our original payment to you.
Pay only at the end
Our HESA is a financial contract, not a loan, so its cost structure might look a little different from what you’re used to seeing. The amount you pay at the end of the HESA depends on the appraised value of your home at that time and is impossible to predict in advance.
Your payment at the end of your HESA will be equal to the HESA amount plus (or minus) our share of the change in value of your home. The size of our share depends on how much equity you’ve accessed with your HESA. Generally, we share in the appreciation of your home at a rate of 4 times the percentage of your home’s value being accessed through our HESA. For example, if you tapped into 10% of your home’s value, you’d share 40% of the future appreciation with us.
It’s impossible to know your final payment amount until the end of your HESA but it can be helpful to consider a range of hypothetical scenarios to understand how it is calculated. Since your payment to us is based on the equity you accessed initially and the change in your home’s value since then, the rest of your existing equity is protected in every scenario.
1. Fair market value of the home, as determined by an independent and accredited appraiser at the start of the HESA.
2. We apply a risk adjustment rate (typically 5%) to the initial appraised value of the home to reflect the inherent uncertainty in any valuation and the fact that the home is not actually being sold. This starting value is used in calculating the change in the value of the home over the term of the HESA.
3. Our payment to the homeowner at the beginning of the HESA before any fees and expenses are deducted. We charge an origination fee equal to 5% of the equity being accessed at the start of the HESA. Expenses include an independent appraisal, a home inspection and the cost of registering our charge on the property.
4. Total change in the home’s fair market value since the start of the HESA. Hypothetical values for illustrative purposes only.
5. Sale price confirmed to be fair market value by an independent and accredited appraiser at the end of the HESA.
6. Homeowner’s payment due to us at the end of the HESA, which is equal to the HESA amount plus (or minus) our share of the change in value of the home. The payment amount above excludes any fees and expenses. We charge a closing fee equal to the greater of 1% of our share of the home’s appreciation or $500. Expenses include an independent appraisal and the cost of discharging our charge on the property.
Thinking about a HESA?
Learn more about our streamlined process for applying for a HESA.