Our terms

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

When you take out a Fraction Mortgage, we set a maximum amount you can borrow based on the equity you have in your home. This is provided to you in a lump sum payment.  

No matter the term length, we offer no required monthly payments* on our first-lien open line of credit.

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 how we calculate our appreciation rates.

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

Expected feesAccessing FundsRepayment
Draw periodsRenewing or exitingMissing payments

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%.

Fraction charges a 1% renewal fee for every Fraction Mortgage. 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.

Origination Fee

Up to 2.50%

Washington only

Renewal Fee

1.0%

How do I access my funds?

Once you’ve been approved for a Fraction Mortgage, you will receive a lump sum amount upfront.

During the “draw period” you will be able to repay and redraw funds, up to your original loan amount. The draw period for the Fraction Mortgage are as follows:

5 year term draw period

18 months

10 year term draw period

36 months

Once the Fraction Mortgage moves into the repayment period, borrowers aren't allowed to withdraw any more money, and your optional monthly payment will include the principal and interest.

When the draw period ends, your Fraction Mortgage will move into the repayment period, which means you can no longer withdraw funds that were repaid. From here, any future repayments will go towards paying down the loan.

What happens when the draw period ends?

When the draw period ends, you enter the repayment period. During this time, you can no longer access any of the funds you may have paid back during the draw period.

Any payments you make after your draw period cannot be redrawn. This means that 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.

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 Zillow Home Value Index (ZHVI) by zip code.
See if you qualify

How does repayment work?

Fraction is not like your average home equity loan. Although Fraction allows borrowers to make optional monthly payments, you can choose not to.

This means you can pay off your entire lump sum loan at the end of your term, with no payments along the way.

The length of your Fraction Mortgage repayment period depends on the term you choose:

5 year term

Draw Period

18 months

Repayment

42 months

10 year term

Draw Period

36 months

Repayment

84 months

When the draw period ends, you enter the repayment period. During this time, you can no longer access any of the funds you may have paid back during the draw period.

Any payments you make after your draw period cannot be redrawn. All prepayments you make go toward your interest accrued then to the principal amount of your loan.

This means that 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 Zillow Home Value Index (ZHVI) by zip code.

Renewing or exiting?

At the end of your term, you can choose to pay your Fraction Mortgage back or renew for another 5 or 10 year term. Renewals are contingent on several conditions including credit score and appraisal.

If you choose to exit, you enter the repayment period. 

Want to pay your Fraction Mortgage back sooner? No problem. We do not charge repayment penalties.

What happens if I cannot pay a Fraction Mortgage back?

The Fraction Mortgage is a loan secured by your home. If you fail to pay your loan amount back during the repayment period, you risk facing foreclosure.

If you think you’ll miss a payment or run into trouble making payments, contact Fraction immediately.

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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