Our rates

Fraction offers 2 term lengths, a 5 or a 10 year term.

Depending on the term you select, your Fraction Mortgage rate will vary.

5 year vs. 10 year terms

Depending on the term you choose, there will be a difference in what you pay. What you owe Fraction in the end is based on how much your home value goes up in those 5 or 10 years.

Learn more about our terms.

5 year term

Homeowners benefit from being able to access up to 45% of their home value.

However, they will need to pay an additional 1% renewal fee should they decide to renew beyond the five year period.

LTV

45%

APR (Min)

6.20%

APR (Max)

12.20%

10 year term

Homeowners can only access up to 34% of their home value, meaning less up-front cash.

The benefit of selecting the 10 year term is that you only pay the renewal fee of 1% once in 10 years vs. twice in 10 years when you renew following a 5 year term.

LTV

34%

APR (Min)

7.57%

APR (Max)

15.91%

Further exploration

Minimum rateAverage rateHome appreciation
Expected feesLoan amountSimple vs compound interest

Why does Fraction have a minimum rate?

The Fraction Mortgage has a minimum rate to ensure that Fraction is able to continue providing you with financial solutions.

We believe that for an equity product, 6.20% APR*  for a 5 year term and 7.57% APR* for a 10 year term are reasonable rates. Especially given that payments throughout the term are not required*.

What is Fraction’s average interest rate?

There isn’t an exact average interest rate since it’s based on the appreciation rate of your zip code.

Fairness-based pricing

Fraction uses the Zillow Home Value Index for your ZIP code to track the value of your home over time.

Enter your zip code below to compare your property growth to Fraction's rate for your area.

What fees can I expect?

Depending on the state you’re in, your origination fee will differ.

In Washington, you pay the same origination fee for both terms: up to 2.50%. If you choose a 5 year term with Fraction and then renew for another 5 years, you will be subject to a 1% renewal fee.

Origination Fee

Up to 2.50%

Washington only

Renewal Fee

1.0%

On top of the origination fee, there are a few others that come with your Fraction Mortgage. These include: escrow and title fees, inspection & appraisal fees, property insurance and other taxes & government fees.
Get an estimate

How do you determine the amount I pay back?


Fraction does an appraisal at the time of origination and then the final value is determined by the Zillow Home Value Index (ZHVI) by zip code. The borrower has the option to do an appraisal at their expense if they feel the Zillow value is too high. We pull the ZHVI for the zip code at the end of the term.

When paying Fraction back, all payments you make on your Fraction Mortgage go first toward the balance, including interest, and then to the principal amount of your loan.

The amount of interest will be calculated on top of the amount you are left with at the end of your draw period. This benefits the borrower, as the total amount that the interest rate will be applied to is going down over time as you make more prepayments.

Your final payment amount will include the remaining balance on the loan less the prepayments you made and the interest accrued.

With a Fraction Mortgage, our rates are variable and when you are ready to repay your loan, the amount you pay back, with interest, is based on the appreciated value of your home, based on the ZHVI by zip code.

Understanding interest: simple vs. compound

Fraction’s rates are determined using simple interest over compound interest as it is better for shorter or temporary loans, and is easier to calculate and understand.

The difference between the two are as follows:

Compound Interest

Any interest earned is added to the principal, forming a new base from which the next round of interest is calculated. This can accrue over many different time periods: daily, monthly, or quarterly.

Simple Interest

The amount you pay back will be calculated annually on the amount that you owe. With mortgages and most car loans, simple interest accrues but does not compound, which results in you paying less at the end of your term.

As a borrower, loans that feature a simple interest rate mean that you’ll only have to worry about interest added onto the outstanding principal balance.

Need more info?

Chat with a Fraction Team Member today.

Trustpilot testimonials

Don't just take our word for it. See what others are saying about us on Trustpilot.
"I was thrilled to choose fraction for my mortgage it really solved a lot of life for me. The process was smooth and even though I had a mortgage broker, the folks at fraction were always there to talk to me and make sure I understood where we were at all parts through the transaction."
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by Jeff S.
"Fraction was the lender my mortgage specialist was most impressed with. They work remotely and are definitely easier to deal with than a bank. They simply don't have the restrictions that banks have. I highly recommend them to anyone looking to get equity out of their home."
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by Christine M.
"Fraction provided exactly the product I needed for my plans and lifestyle. My broker explained all the details really well and was always a call away for advice and to update information. The process was simple, and communication excellent."
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by Lawrence E.
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Access up to 45% of your hard-earned equity in tax-free cash without selling your home. Our motto is “spend a little, invest a lot, and save some for a rainy day.”
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