HELOC closing costs and fees
HELOCs cost much less to open than a refinance. The fees to ask about aren't always the upfront ones.
Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated
How much are HELOC closing costs?
HELOC closing costs range from $0 to about 5% of the credit line. Many banks pay the costs if you keep the line open two to three years and charge an early-closure fee if you don't. Other lenders, including many fixed-rate HELOC lenders, charge an origination fee of up to about 5% taken from the funds. Annual fees run $0–$100.
On this page
Fees to ask about
| Fee | When | Notes |
|---|---|---|
| Valuation or appraisal | At closing | Waived or low with an automated value |
| Origination | At closing | Often $0; sometimes a flat fee or points |
| Title search or report | At closing | Lighter than a purchase policy |
| Recording and state taxes | At closing | Some states charge a mortgage tax; see your state |
| Annual fee | Yearly | Often $0–$100 |
| Early-closure fee | If closed early | Repays waived costs if you close within 2–3 years |
| Inactivity or minimum draw | Varies | Read the agreement |
Use a free calculator, or get your HELOC rate from Shawn.
"No closing costs"
The lender pays them, and recovers them through the early-closure fee or a slightly higher margin. That's a fair trade if you'll keep the line for years.
Example: a $100,000 line
A lender covers $1,200 of closing costs but charges a $450 early-closure fee if you close within 3 years. Keep the line 3 years and it cost you nothing to open. In states with mortgage taxes, such as Florida or Minnesota, those taxes are often paid by the borrower even on no-cost lines.
What each cost is
| Cost | Typical range | Notes |
|---|---|---|
| Appraisal or valuation | $0–$700 | Many lines use an automated valuation; full appraisals for larger lines or unusual homes |
| Title search and insurance | $0–$1,000+ | Varies by state and line size |
| Recording fees and taxes | $50–$500+ | Some states charge a mortgage tax on the line amount |
| Origination or processing fee | $0 to about 5% of the line | Often waived at banks; many fixed-rate and online HELOCs charge 1%–5%, taken from the funds |
| Credit report and flood certification | $25–$100 | Small, but on the list |
| Annual fee | $0–$100 a year | Some waive it in the first year |
State taxes can matter
A few states tax the recording of a mortgage, including HELOCs, based on the line amount. That can add hundreds to thousands of dollars on large lines. Your state page lists what applies where you live. HELOCs by state.
How to lower costs
- Ask whether the lender will waive the appraisal and use an automated valuation.
- Ask for the origination fee to be waived in exchange for a slightly higher margin, or the reverse, depending on how long you'll keep the line.
- Get the early-closure terms in writing if you might sell within three years.
Example: three offers on a $100,000 line
Lender A: $0 closing costs, $450 early-closure fee in three years, prime + 0.75. Lender B: $850 closing costs, no early-closure fee, prime + 0.50. Lender C: $0 closing costs, $75 annual fee, prime + 1.00. On a $60,000 balance kept for five years, Lender A costs the least: Lender B's lower margin saves about $750 but its closing costs are $850. Keep the balance ten years and Lender B wins, saving about $1,500 in interest against its $850 in costs. Lender C's higher margin and annual fee make it the most expensive either way.
Mistakes to avoid
- Ignoring early-closure fees.
Also asked
Can HELOC closing costs be rolled into the line?
Often, yes. Many HELOC lenders let you pay closing costs by drawing them from the line at closing instead of paying them out of pocket.
Are HELOC closing costs tax-deductible?
Generally not. Most HELOC closing costs aren't tax-deductible, although some of them may be added to your home's basis instead.
Why did my HELOC have no closing costs?
A no-closing-cost HELOC means the lender paid the costs, usually recovering them with an early-closure fee if you close the line within a set period, often 2–3 years, or through a slightly higher margin.
Are HELOC closing costs negotiable?
Sometimes. Lenders may waive origination or processing fees, especially for existing customers or larger lines, or trade fees for a slightly different margin. Third-party costs like title and recording are set by others, but you can ask whether the lender will cover them.
Didn't see your question? Ask Shawn
Preview only. Nothing was sent.
Sources
Official sources behind this guide.
- What is the difference between a home equity loan and a HELOC? · Consumer Financial Protection Bureau
- What you should know about home equity lines of credit (booklet, PDF) · Consumer Financial Protection Bureau
- Publication 936, Home Mortgage Interest Deduction · Internal Revenue Service
- Regulation Z §1026.40: Requirements for home equity plans · Consumer Financial Protection Bureau