How It Works

EquityChoice, a new type of residential second mortgage that gives your customers the freedom to do more with their housing wealth without monthly payments, ever!

The EquityChoice Growth Opportunity

Generate new business from dormant clients locked into low fixed rates.

Easily expand into the home equity market & gain a competitive edge with an exclusive, innovative product.

Preserve your customer relationship with Newfi who won’t cross-sell to your customers.

Qualify more clients with flexible asset and income eligibility.

The EquityChoice Customer Advantage

Immediate access to funds that can be utilized now, up to $500,000.

A below-market, fixed interest rate for up to 20 years, approximately 4-8% pts. *lower than most traditional home equity products.

No interim or monthly payments requried.

Tax advantages for homeowners, business owners, and investors (consult tax advisors).

Increased cash flow with the ability to reinvest funds to gain investment income.

No prepayment penalities, full or partial at any time.

Unrestricted use of funds for reinvestment or preservation of assets.

Because it’s a mortgage, it has more safeguards for your customers than equity sharing program!

  • Maximum owed is capped at high-cost lending threshold, preserving equity even home appreciates significantly.
  • Regulated loan product with standard docs and disclosures, licensed originators, and easy application process
  • May have special tax benefits for investors & small business owners (consult a tax advisor)

Mortgages designed with your clients in mind.

EquityChoice is a new type of residential second mortgage that gives your customers access to their home equity with more choices than traditional home loans and lower costs than equity sharing agreements. With EquityChoice, your clients can:

  • access from $85,000-$500,000 in cash upfront (up to 16% of their home’s value)
  • lock in a low fixed rate of approximately 4% (compounds monthly, 500-800+ bps below most home loan rates)
  • preserve cash flow for reinvestment as they don’t have to make monthly payments

Below Market Fixed Interest Rate

In exchange for a “below market” interest rate and no monthly payments, the homeowner agrees to pay a share of the “future appreciation” of their home (as variable interest) when the loan matures (10, 15, 20 years). They owe a share in their home’s appreciation if the value of the home goes up. If the home value goes down, they only owe principal and fixed interest of 4% that compounds monthly (a windfall in a down housing market).

  • They can expect to owe a share of future gain in their home value that is equal to 3 x their original LTV% (3%-48% of the home’s appreciation). 
  • They can never owe more than the state/federal high-cost lending threshold in fixed interest and the Shared Appreciation Amount at time of payoff (averaging between 12%-14.5% APR in 2022, varies by state/month)


The choice is entirely up to your client; however, we do suggest thinking of long-term strategies that can assist in diversifying their investments, building wealth with the time advantage of immediate funds available, and increasing monthly cash flow. Common use cases include:

  • buying a second home or rental property
  • reinvesting in assets with high-yield potential
  • adding monthly cash flow 
  • making “value added” home improvements or renovating to “age in place”
  • starting or funding an existing business 
  • investing in or paying off educational expenses
  • funding long-term expenses and/or retirement needs

End of Term

When the loan matures, your client will have various options for paying back the outstanding loan balance such as:

  • using funds from savings, income from real estate properties, or other investment accounts
  • refinancing with a traditional mortgage or home equity loan

using part of the proceeds from selling the home

Product Comparison Chart

Since your customers have many options when it comes to home financing, it’s important to see how EquityChoice stacks up against other traditional products.  Here’s a quick breakdown of the most common features compared with other financing alternatives:

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