Personal Finance
Is Tapping Your Home Equity A Smart Move Right Now?
Explore the pros, cons and a flexible new option that could help fund big expenses without high monthly payments.
Life can be unpredictable, but for homeowners, a house can be more than just a place to live — it can also serve as a financial cushion. According to the National Association of Realtors, the average U.S. homeowner has gained over $150,000 in equity over the past five years. Yet, that value often goes untapped.
And when major expenses pop up — from renovations to unexpected debt — tapping into your equity may help cover the cost without adding financial strain to your monthly budget. Here’s what you need to know about borrowing against your home — and how Unison offers a more flexible path to doing so.
How Borrowing Against Home Equity Actually Works
Home equity is the difference between your home’s current value and what you still owe on your mortgage. As you pay down your mortgage — and if your home’s value rises — your equity grows.
Two of the most common ways to access that equity include:
Home Equity Loan
A home equity loan gives you a lump sum of cash that you repay with interest in fixed monthly installments. The amount you can borrow typically depends on how much equity you’ve built — often up to 80–85% of your home’s value, minus your mortgage balance.
HELOC (Home Equity Line of Credit)
A HELOC works like a credit card: you borrow as needed during a draw period (usually 5–10 years) and repay with variable interest. After that, you enter a repayment period that includes both principal and interest.
What Tapping Your Equity Can Help With — And What To Watch Out For
Your home equity can be a powerful tool — whether you're looking to pay down high-interest debt, invest in home improvements, or supplement your income during retirement.
But like any financial move, it’s not without trade-offs. Borrowing against your home means taking on more debt, and if property values drop, your equity could shrink. Plus, depending on the loan type, variable interest rates can raise your monthly costs over time.
What Makes Unison’s Equity Loan Different — And Why It Might Work for You
Unison’s Equity Sharing Home Loan offers a smarter, more flexible way to tap into your home’s equity without the high monthly payments and compounding interest of traditional second mortgages. You can access up to $400,000 (or 35% of your home’s value, depending on location) through low, interest-only payments over 10 years — with no prepayment penalties.
Here’s how it works:
- You receive a lump sum of cash upfront
- You make affordable, interest-only monthly payments for 10 years
- At the end of the term (or if you sell or refinance), you repay the original amount, any deferred interest added to principal, plus a share of your home’s future appreciation
That means you can cover big expenses now — like home improvements, debt or big ticket items — without ballooning payments that strain your monthly finances.
To qualify, you typically need at least 30% equity in your primary residence and a FICO score of 680 or higher.
Unison’s Equity Sharing Home Loan is designed for homeowners who want to unlock cash without refinancing, tackle big expenses, and enjoy predictable, low payments — all while sharing in the future value of their home.
Your home is one of your most valuable assets, and Unison helps you put that equity to work in a way that’s flexible and mutually beneficial — giving you financial breathing room today while partnering for tomorrow’s growth.
Ready to unlock your home’s potential with Unison? Discover your options and get started today.
Disclaimer: This article is sponsored by Unison and provides general consumer information only. It is not financial, legal, or investment advice. Consult a qualified professional before making decisions about home equity products. Borrowing against home equity involves risks, including increased debt, potential loss of equity if property values decline, and foreclosure if payments are not made. Unison’s Equity Sharing Home Loan requires a minimum FICO score of 680, at least 30% home equity, and other eligibility criteria; repayment includes the original amount, deferred interest, and a share of future home appreciation. Terms and availability vary by location. Contact Unison for details. This article contains links to third-party websites, which we do not endorse or control. Access these links at your own risk. Statements about home value appreciation are forward-looking and based on assumptions; actual results may vary.
