Options for Tapping Home Equity Without Monthly Payments 

Key Takeaways

• Using a home equity loan to tap your home’s equity requires regular monthly payments.

• However, there are several ways to access your equity that don’t require monthly payments.

• These include home equity sharing, reverse mortgages, sale-leaseback transactions, and co-ownership arrangements.

• To choose the best method for your needs, consider how much you need to borrow and how long you’d like to remain in the home, among other factors.

Homeowners in the U.S. are sitting on a combined $17.3 trillion in home equity, according to a 2025 quarterly report from Cotality. That’s a lot of money that could be used for home improvements, education costs, even daily expenses. But the most common methods of accessing that equity come with interest charges – and monthly payments, which can be a drag on your household budget.

According to Unlock’s recent economic survey, 42% of homeowners would be willing to consider accessing their equity if they could do it without a traditional loan or another monthly payment. Fortunately, there are several ways of accessing your home’s equity that don’t involve making a monthly payment (or selling your home). Let’s take a look at how each of these options work, their pros and cons, and which questions to ask to decide which method might work best for you.

Four ways to tap equity without a monthly payment

A home equity loan or a home line of credit are not your only options for accessing the equity you’ve built in your home. If you want access to funds but don’t need the headache of another monthly payment, consider one of the following four alternatives.

Home equity agreement

If you’re not familiar with a home equity agreement (HEA), think of it as sharing a portion of the equity of your home in the future, in exchange for cash up front today. Home equity sharing lets you continue to live in and own your home, and there are no monthly payments or interest charges to worry about. 

Home equity agreements typically offer more flexible qualification requirements than traditional loans. For example, with Unlock’s HEA, you may be able to qualify with a minimum credit score of 500 and at least 30% equity in your home.  You receive funds after completing the HEA application process and you are able to use the money however you like for between 10 and 30 years, depending on the HEA provider. With Unlock, you can settle the agreement any time during the term by selling your home or buying back your equity with cash on hand. That’s it – no loans, no interest payments, no hassle.

Reverse mortgage

Another popular method of accessing your home equity is via a reverse mortgage. With a reverse mortgage, the bank pays you – not the other way around. You can get a lump sum of funds and you don’t need to pay it back until you move out or sell the home. Keep in mind that for most reverse mortgages, including a Home Equity Conversion Mortgage (HECM), the homeowner must be 62 or older.

Sale-leaseback

A sale-leaseback transaction allows you as the homeowner to sell the home, receive the proceeds of the sale, and lease the property back from the buyer. In effect, the buyer becomes your landlord. Because you’re leasing the property, you get to remain living in it, even as you enjoy the money you received from selling it. While sale-leasebacks rose in popularity among commercial real estate properties during the pandemic, residential real estate owners are also increasingly exploring them as an alternative way to tap equity.

Co-ownership

A less common method is co-ownership. With co-ownership, you share the ownership of – and equity in – a property with someone else. For instance, you might sell a “share” or portion of ownership to someone else and receive funds in return. Depending on the agreement, you can remain in the home until you sell, and your share of the home remains yours. When you sell, the co-owner would receive a portion of the proceeds according to how big a share they own, and you receive the rest.

How to decide which option is right for you

So, you know you don’t want to have a monthly payment, but you still want to be able to tap the equity you’ve built. Here are some questions to help you choose an option that suits your situation.

• How long do you plan to stay in the home? If you plan to stay in the home a long time (years or even decades), a home equity agreement or reverse mortgage might be the right choice. With those options, you can gain access to your equity and remain in your home for a long time to come.

• Do you already have a mortgage on the home? Some equity options can be used in addition to a first mortgage. For instance, you can get an HEA even if you already have a home loan. Similarly, you may be able to get a reverse mortgage even with a mortgage already in place; when you sell the home, the proceeds will be used to pay off both mortgages. To do a sale-leaseback, you would use the proceeds of the sale to pay off the mortgage before using the rest of the funds as you like.

• How comfortable are you with sharing ownership? If you’re open to the idea, then a co-ownership arrangement could be a good fit. With an HEA, you’d still own the home, but you’d give a share of the proceeds to the home equity company later, when you sell or otherwise settle the agreement.

• How much money would you like to take out? Different options have different limits to the amount of equity you can access. For instance, with a reverse mortgage, you might be limited to 40% to 60% of your total equity. Home equity agreements are often available for anywhere between $15000 and $500,000. With co-ownership, the amount of money you can get will depend on your agreement with the co-owner. And with a sale-leaseback, you can get up to 100% of your home equity.

• How do you feel about paying interest? A reverse mortgage will carry interest charges, which you’ll need to repay. Reverse mortgages are available with both fixed and variable interest rates. HEAs aren’t loans, so you don’t pay interest charges monthly. The same goes for a sale-leaseback or co-ownership agreement.

Conclusion

As a homeowner, your home equity could be a major source of funds. There are plenty of ways to tap into that equity, but if you want to do so without monthly payments, consider your options carefully before choosing the right fit for your situation.