Hometap vs Reverse Mortgage: Which Is the Better Way to Tap Equity?
Last updated 10/02/2025 by
Ante MazalinEdited by
Andrew LathamSummary:
Home equity investments like Hometap offer upfront cash in exchange for a share of your home’s future appreciation, with no required monthly payments. A reverse mortgage lets homeowners age 62+ convert equity into cash or monthly income while deferring repayment until they leave the home. The right choice depends on your age, goals, and whether you prefer an equity-sharing model or a senior-focused loan.
Here’s how Hometap and a reverse mortgage compare on funding, terms, costs, and risks.
Quick Comparison: Hometap vs Reverse Mortgage
| Feature | Hometap | Reverse Mortgage |
|---|---|---|
| Funding Amount | Up to $600,000 | Varies by age, home value, and program |
| Term Length | 10 years | No fixed term; due when homeowner sells, moves, or passes away |
| Origination Fees | 4.5% | Up to $6,000 (federally capped for HECMs) |
| Closing Costs | 1% - 5% | ~2% – 5% of loan + FHA mortgage insurance |
| Monthly Payments | None | None (borrower responsible for taxes, insurance, and upkeep) |
| Maximum LTV | 75% | Depends on borrower age and program |
| Credit Score | 585 | Generally flexible; financial assessment required |
| SuperMoney Rating | strongly recommended | Varies by lender |
Hometap Overview
Hometap provides upfront funding in exchange for a share of your home’s future appreciation. There are no required monthly payments, and repayment happens when you sell or after 10 years.
How it works
Hometap invests up to Up to $600,000 in exchange for 5% - 25% of future appreciation. Fees include Origination Fees 4.5% and Closing Costs 1% - 5%.
Reverse Mortgage Overview
A reverse mortgage is a loan for homeowners 62+ that converts equity into cash or monthly income. Borrowers stay in the home but defer repayment until they move out, sell, or pass away.
How it works
The lender advances funds as a lump sum, monthly payments, or line of credit. No monthly mortgage payments are required, but homeowners must maintain the property and pay property taxes and insurance. Repayment occurs when the home is sold or the borrower no longer lives there.
Fees and Terms Breakdown
| Criteria | Hometap | Reverse Mortgage |
|---|---|---|
| Funding Amount | Up to $600,000 | Based on home value, borrower age, and FHA limits |
| Term Length | 10 years | No fixed term; due upon sale, move, or death |
| Repayment | At sale or after 10 years | When home is sold, vacated, or borrower passes away |
| Origination Fees | 4.5% | Up to $6,000 (HECM cap) |
| Closing Costs | 1% - 5% | ~2% – 5% of loan + FHA mortgage insurance |
| Share of Appreciation | 5% - 25% | None (loan balance grows with interest) |
Key Differences
- Eligibility: Hometap is open to a wider age range; reverse mortgages require age 62+.
- Ownership: Reverse mortgages are loans; Hometap is equity-sharing with no loan balance.
- Costs: Reverse mortgages include interest, insurance, and closing fees; Hometap has origination + closing costs and appreciation share.
- Repayment: Hometap ends at sale or after 10 years; reverse mortgage ends when the borrower leaves or passes.
Which Is Best for You?
- Choose Hometap if you want upfront cash without age restrictions, no required monthly payments, and can accept sharing future appreciation.
- Choose a Reverse Mortgage if you’re 62+, want to remain in your home, and prefer a loan structure designed for retirement needs.
What’s Next
Want to explore further? Below you can read the full Hometap review or browse reverse mortgage options.
Hometap
Read the full Hometap review to see detailed fees, eligibility, and user ratings.
Reverse Mortgage
Browse our reverse mortgage lenders to compare programs available today.
Compare More Providers
- Unison vs Hometap – Compare two major HEA providers.
- Hometap vs Splitero – Learn how they differ on eligibility and costs.
- Unlock vs Hometap – See which provider offers broader flexibility.
- Splitero vs Unlock – Two alternatives with different equity models.
- Unison vs Point – Explore how these shared equity providers compare.
Or explore other home equity solutions: Visit our HELOC options, home equity loans, or the full list of home equity agreement providers.
The Bottom Line
Hometap offers upfront funding with no monthly payments but requires sharing in appreciation. Reverse mortgages provide senior homeowners with cash or income streams while deferring repayment, but come with insurance, fees, and interest charges. The better choice depends on your age, goals, and whether you prefer equity-sharing or a senior-focused loan structure.
Key Takeaways
- Hometap: Up to $600,000 available, no monthly payments, shares N/A of appreciation.
- Reverse Mortgage: No monthly payments, but available only to 62+ and adds interest + insurance costs.
- Eligibility: Hometap works for a broader age range; reverse mortgages are restricted to seniors.
- Repayment: Hometap ends at sale/contract term; reverse mortgages end when borrower leaves the home.
FAQ
Does Hometap require monthly payments?
No. Repayment occurs when you sell your home or after 10 years.
Who qualifies for a reverse mortgage?
Reverse mortgages are available to homeowners 62 or older who live in the property as their primary residence.
Which is cheaper—Hometap or a reverse mortgage?
Reverse mortgages may have lower upfront costs but accrue interest and insurance over time. Hometap avoids debt and interest but requires sharing future appreciation.
Do heirs keep the home with a reverse mortgage?
Heirs may keep the property if they repay the loan balance, typically by selling or refinancing the home.
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