HEI vs. HELOC: which costs you less?
One charges interest you can see. The other takes a share of your home's growth you can't. Put both on the same numbers and see which wins in your scenario.
Compare the two
Illustrative — interest-only HELOC vs an appreciation-share HEI; fees excludedHow this is calculated
For the HELOC, we take the cash you draw and charge interest at your rate for the whole term — the interest-only case, so it lines up with the HEI's single settlement at the end. For the HEI, we grow your home's value by the appreciation rate, then take the company's share of that gain.
HELOC cost = cash × rate × years
HEI cost = share% × (home value at end − home value now)
Both are simplified. A real HELOC usually pays down principal too, and a real HEI adds upfront fees and a discounted starting value. This model shows the core trade: known interest versus an unknown share of your home's growth. Push the appreciation slider up to see the HEI's cost climb past the HELOC's.
The HELOC almost always wins on total cost when your home rises in value — but it needs a monthly payment and good credit. The HEI needs neither, which is its real appeal for people who can't qualify or can't carry a payment.
See who each one fits, and rule out the pricier path, on the HEI vs. HELOC guide.