Hometap updates HEI pricing with two-tier multiplier

Under the new structure, homeowners who settle their investment within the first five years will be subject to a 1.65x multiplier on Hometap’s initial investment as a percentage of the home’s value. Those who settle after five years will face a 1.80x multiplier.

Hometap stated these changes are intended to simplify costs and offer homeowners greater flexibility when accessing home equity. "As rising insurance premiums, property taxes and other homeownership costs continue to place added pressure on monthly household budgets, homeowners need financial solutions that work for them, not against them," Hometap CEO Jeffrey Glass said in a statement.

The company also adjusted its cap on investment costs to 18.5% compounded monthly, which it described as a consumer protection measure establishing the maximum potential cost upfront. Homeowners can still settle their investments at any time before the term ends without prepayment penalties.

Hometap President Sarah Dekin noted that the updated pricing significantly narrows the cost difference between HEIs and traditional home equity products. "With our new pricing, we’ve significantly closed the gap between HEIs and traditional home equity products like HELOCs and home equity loans," Dekin said. "When you factor in the flexibility of no monthly payments, this becomes a genuinely compelling option for a much broader range of homeowners."

These pricing changes occur as homeowners possess substantial home equity but face rising housing-related expenses and elevated interest rates. HEI providers are increasingly positioning their offerings as alternatives to traditional borrowing, especially for those who may not qualify for or desire additional debt. However, the sector has faced scrutiny regarding consumer understanding of product mechanics and costs, with some providers accused of misleading marketing and disclosure practices. Earlier this year, home equity investment company Unison was named in a class-action lawsuit alleging deceptive marketing and that its agreements left homeowners with less equity than expected, claims Unison denies.