Summary
Split Pay has raised $125 million to expand a fintech platform that allows approved renters and homeowners to split monthly housing payments into two installments while landlords and mortgage servicers still receive the full payment on time. The service uses cash-flow underwriting and currently charges $9.99 plus 1.5% of the total payment.
A fintech company has raised $125 million around a simple but revealing premise: Americans may be able to afford their housing payment, but they increasingly struggle with when that payment comes due.
Split Pay, formerly known as Rent App, has raised approximately $125 million across its Series A and Series B funding rounds, according to Axios. The financing was led by Khosla Ventures, with participation from Thrive Capital and other investors, including PayPal co-founder and Affirm CEO Max Levchin.
The company’s product allows approved consumers to divide large recurring bills — including rent and mortgage payments — into two installments.
The landlord, mortgage servicer or lender still receives the full payment on the normal due date.
Split Pay covers the portion the consumer has not yet paid and then collects the remainder roughly two weeks later, according to the company’s explanation of how Split Pay works with lenders and mortgage servicers.
That makes Split Pay neither a mortgage refinance nor a modification of the underlying home loan. The consumer continues making the same required mortgage payment to the same servicer under the existing mortgage terms.
What changes is the timing of the consumer’s cash flow.
And investors are betting heavily that there is demand for it.
How the mortgage product actually works
A homeowner using Split Pay receives account and routing numbers that can be entered into a mortgage servicer’s payment portal much like a conventional bank account.
When the servicer pulls the scheduled mortgage payment, Split Pay provides the full amount.
The consumer makes one payment to Split Pay on the mortgage due date and a second payment approximately 14 days later, according to the company’s mortgage payment instructions.
The servicer does not have to integrate its system with Split Pay, according to the company. From the servicer’s perspective, the scheduled mortgage payment arrives in full.
Split Pay says the underlying banking services associated with the account are provided by Evolve Bank & Trust, according to its mortgage product page.
Approval does not necessarily mean a consumer begins with an even 50-50 split.
Split Pay says it evaluates income, spending and savings using cash-flow underwriting rather than relying on a traditional credit check. An approved user may initially be allowed to defer as little as 30% of the payment, with that share potentially increasing over time after successful payments, according to the company’s explanation of its approval process.
For example, a homeowner with a $2,400 mortgage and a full 50% split could pay approximately $1,200 when the mortgage is due and the remaining $1,200 two weeks later, before accounting for Split Pay’s service fee.
The flexibility is not free
That fee is an important part of the story.
Split Pay currently charges $9.99 plus 1.5% of the total bill each time a housing payment is split, according to the company’s published fee schedule.
For a $2,000 mortgage payment, that works out to $39.99 for the month.
For a $2,500 mortgage payment, the cost would be $47.49.
For a $3,000 mortgage payment, it would be $54.99.
A homeowner using the service every month on a $2,500 mortgage would therefore pay approximately $570 a year for the ability to shift part of each month’s payment by about two weeks.
Split Pay does not make housing cheaper. It sells consumers flexibility over when the largest bill of the month hits their bank account.
That does not automatically make the product uneconomic. For a household whose problem is timing rather than overall income, the ability to align a major housing payment more closely with two paychecks may be valuable.
But consumers should understand exactly what they are purchasing.
Split Pay does not reduce the mortgage balance, lower the mortgage interest rate or permanently lower the household’s housing expense.
It provides short-duration cash-flow flexibility — for a recurring fee.
A housing affordability story hiding inside a fintech story
The financing round is notable because investors are not simply betting on a new payment app.
They are betting that the timing of housing costs has become a large enough household problem to support a major financial-services business.
That deserves attention.
Most mortgage payments are due monthly.
A large share of American workers, however, receive paychecks every two weeks or twice per month. A household may therefore have sufficient monthly income to cover housing costs while still experiencing a significant liquidity squeeze when a mortgage payment, car payment, insurance bill and other expenses cluster around the beginning of the month.
Split Pay is attempting to turn that mismatch into a product.
CEO and co-founder Andrew Borovsky told Axios that the company has spent roughly two years developing an AI-driven underwriting system designed especially around consumers under 40.
Split Pay describes that underwriting process in more straightforward terms on its How It Works page: the company analyzes a consumer’s income, spending and savings to determine eligibility and the portion of the bill it is willing to defer.
That approach is consistent with a broader fintech shift toward cash-flow underwriting, where companies attempt to evaluate a borrower’s ability to repay using bank-account activity instead of relying exclusively on conventional credit scoring.
Mortgage servicers do not have to participate
One of the most unusual parts of the model is that a mortgage company does not have to formally adopt Split Pay for one of its customers to use it.
According to Split Pay’s servicer instructions, consumers enter the company’s account and routing information directly into their existing mortgage-payment portal.
The mortgage servicer simply receives the full scheduled payment.
Split Pay says the service works with major mortgage servicers, although individual payment systems may vary.
That structure could allow the company to scale without negotiating integrations with hundreds of lenders and servicers.
It also means mortgage companies may increasingly encounter customers using third-party financial products to manage payment timing even when the lender itself has not created or endorsed those products.
For servicers, that raises a broader question about whether consumers increasingly expect flexibility around the traditional once-a-month mortgage-payment structure.
Rent came first. Mortgages are the expansion.
Split Pay began as Rent App, a product focused primarily on rental payments.
The company retired the original Rent App full-payment functionality earlier this year and rebranded around a broader mission of splitting major recurring bills. Mortgage, auto and student-loan payments have since become part of the platform, according to Split Pay’s announcement explaining the transition from Rent App.
The move into mortgages significantly expands the addressable market.
Housing is typically a household’s largest monthly expense. Even small changes in the timing of that expense can have an outsized effect on short-term liquidity.
Split Pay’s pitch is that consumers should not need to restructure an entire mortgage simply because a monthly payment does not align neatly with their paycheck schedule.
That is a compelling proposition.
It is also one consumers need to evaluate carefully.
A recurring fee for shifting a payment by two weeks can become meaningful over time, and a consumer who regularly lacks enough cash to make the second payment may have a deeper affordability problem that timing alone cannot solve.
Split Pay notes in its eligibility guidance that eligibility and approval amounts can change and that consumers must continue meeting payment requirements to use the service.
Investors see a much bigger market
Khosla Ventures lists Split Pay among its portfolio companies and describes the company broadly around splitting consumers’ largest bills.
That suggests the endgame is considerably larger than rent.
The company already markets the service for mortgages and vehicle payments and says other major expenses are expected to follow.
If consumers adopt the model at scale, the idea could become another layer in the increasingly complicated financial infrastructure surrounding housing.
The mortgage itself would remain unchanged.
But the way households manage the payment could begin to change substantially.
For an industry that has spent years focused primarily on lowering the cost of housing, Split Pay represents a different wager:
When you cannot immediately make housing cheaper, there may be money to be made making the payment easier to time.
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