Unison announces rate cut on alternative home equity loan product

San Francisco-based home equity solutions provider Unison announced Monday that it’s lowering the annual percentage rate (APR) on its Equity Sharing Home Loan, an alternative funding vehicle aimed at helping U.S. homeowners tap into record levels of equity.

Unison said in a press release that the move is coming at a time when “Americans face growing economic uncertainty, volatile markets, and mounting household debt.” For borrowers who qualify for the Equity Sharing Home Loan, the lower APR of 5.34% on this product offers “substantial savings compared to traditional second mortgages.”

The company said that for a $100,000 loan through Unison, the 5.34% rate equates to monthly payments as low as $306.

This is roughly one-quarter of the typical monthly payment of $1,222 on a 10-year, closed-end second mortgage at current market rates — or a savings of about $10,000 per year.

Industry data cited by the firm shows that rates for second mortgages tend to run between 8% and 10%. Rates for high-risk borrowers sometimes exceed 12%.

“With economic anxiety on the rise and many Americans worried about their financial future, Unison is offering a lifeline,” Thomas Sponholtz, CEO and chairman of Unison, said in a statement.

“We’re helping homeowners tap into the $35 trillion locked in home equity in a way that provides both immediate relief and long-term stability. When families are facing difficult choices about their finances, our innovative approach delivers breathing room that traditional loans simply can’t match.”

Unison’s Equity Sharing Home Loan was launched in September 2024 and combines the features of a traditional mortgage with those found in the emerging home equity investment (HEI) space.

It is a 10-year, interest-only second mortgage that offers lower monthly payments by splitting interest into ongoing (paid monthly) and deferred (compounded) portions. In exchange for a lump sum payment, borrowers also grant Unison access to a portion of their home’s future appreciation.

The company believes the product is a better option than other methods being utilized by households to deal with urgent financial needs, such as credit cards or early 401(k) withdrawals.