Amazon Employees Will Be Able to Use Stock as Collateral for Home Loans

Better.com, an online mortgage lender, has recently partnered with Amazon to provide its employees with a new service called Equity Unlocker, which enables them to pledge their company shares as collateral when purchasing homes. This new service is designed to provide flexibility to Amazon’s workforce, many of whom are compensated with restricted stock units (RSUs) that vest over several years. By allowing employees to use their company shares as collateral, they can obtain loans for down payments without having to sell their shares to raise cash.

However, because Better.com wants to protect itself from a continued slide in Amazon’s stock price, it will charge a higher interest rate on the mortgage for those who pledge their stock as collateral. This is to ensure that Better.com is able to recoup its losses in the event that the stock price drops below a certain level. Unlike stock-based loans, which carry the risk of margin calls requiring borrowers to sell assets to reduce debts, the loan arrangements for Amazon employees will be protected even if the stock price drops.

The partnership between Amazon and Better.com is a part of Amazon’s benefits program, which aims to care for the financial, mental, and physical wellness of its employees. The new service aligns with this mission by allowing…