Are There Closing Costs on a HELOC? Fees, Disclosures, and Rescission

Closing a home equity line of credit usually costs between 2% and 5% of the credit line, so HELOC closing costs on a $50,000 line typically run $1,000 to $2,500. The exact figure depends on your lender, your property’s location, and the size of the line. Some lenders waive these fees upfront in exchange for a higher interest rate, and some let you pay them out of your first draw instead of out of pocket.

What Makes Up the Bill

Your total is the sum of several individual charges. Not every lender charges all of them, and the amounts vary.

Origination fee. The lender’s charge for processing and underwriting the line. It may be a flat amount or a percentage of the credit line.
Appraisal fee. A traditional in-person appraisal typically costs $300 to $500. Desktop appraisals (done remotely from data and photos) and drive-by appraisals (exterior only) cost less but may miss the value of interior work.
Title search fee. The lender checks public records for existing liens or ownership disputes. Usually $75 to $250.
Title insurance. Not always required for a HELOC. When it is, it typically costs 0.5% to 1% of the credit line.
Credit report fee. Usually $10 to $100.
Attorney or notary fee. Several states require an attorney to oversee closing; others use a notary signing agent. Expect $100 to $300.
Flood determination fee. If your property might sit in a flood zone, federal rules require the lender to verify its status, and the lender can pass a reasonable fee on to you.¹
Document preparation fee. Covers the loan contracts and disclosures, typically $100 to $500.
Recording fee. Charged by your local government to record the new lien. Amounts vary by jurisdiction.

What the Total Looks Like

On a $50,000 line, plan for $1,000 to $2,500 all in. Percentage-based fees scale with the line, so a $100,000 HELOC can run $2,000 to $5,000. Local recording taxes can push the number higher in some areas.

Weigh the total against how much you actually plan to borrow. Paying $2,000 in fees to draw $10,000 is a bad trade; the same $2,000 against a $100,000 line is easier to justify.

No-Closing-Cost HELOCs

Some lenders advertise HELOCs with no closing costs, meaning the lender absorbs the third-party fees. The tradeoff is almost always a higher interest rate: the lender recovers its outlay through the extra interest you pay over the life of the line.²

These products usually come with an early termination clause. Close the line within the first two to three years and the lender charges a penalty to recoup what it covered, often a flat $300 to $500 or a percentage of the credit line. If you plan to keep the line open for many years and carry balances regularly, the higher rate can cost more in the long run than paying fees upfront.

How to Pay the Costs

You generally have three ways to handle the bill, and each affects your balance differently.

Pay out of pocket. Writing a check at closing keeps your balance at zero and the full line available. This is the cheapest option overall because you never pay interest on the fees.
Draw from the line. Many lenders let you use your first draw to cover closing costs. The fees show up as an immediate balance on your first statement and start accruing interest right away.³
Take the higher rate. With a no-closing-cost HELOC, the lender fronts the fees and you repay through a higher rate on the whole line.

Rolling fees into the balance avoids the immediate cash outlay but increases the total cost. $2,000 financed at 8% adds roughly $160 a year in interest for as long as you carry it. Paying upfront saves you that ongoing cost if you have the cash available.

Fees That Keep Coming After Closing

Closing costs aren’t the end of it. Once the line is open, some lenders charge recurring fees worth asking about before you sign.

Annual or membership fee. A yearly charge for keeping the line open, typically $5 to $250.²
Inactivity fee. Charged if you go a certain period without drawing on the line. This erodes the value of a HELOC held purely as a safety net.
Transaction or draw fee. A small fee each time you withdraw.
Early termination fee. Closing the line within the first two to three years often triggers a penalty, especially on no-closing-cost products.

What Disclosures You Should Expect

Unlike a purchase mortgage, a HELOC does not come with a Loan Estimate or Closing Disclosure. Those forms are specifically excluded for home equity lines.⁴ Instead, the lender provides a separate set of Truth in Lending Act disclosures when you apply, or within three business days in certain circumstances.⁵

Those disclosures must itemize any fee the lender charges to open, use, or maintain the plan, plus a good-faith estimate of third-party fees like appraisal and title search.⁵ Because you aren’t entitled to a final cost document before closing the way you would be with a standard mortgage, read the early disclosures carefully and ask for an updated breakdown before your signing appointment.

Your Right to Cancel After You Sign

Federal law gives you a three-business-day cooling-off period after you sign. Until midnight on the third business day after closing, you can cancel the entire transaction for any reason.⁶ The lender must tell you about this right and provide the forms to exercise it.

To cancel, send written notice to the lender; the cancellation takes effect as soon as you mail or deliver it. Once the lender receives it, the lender has 20 calendar days to return any money or property connected to the transaction and release its lien.⁶ If the lender failed to provide the required disclosures or rescission notice, your right to cancel extends up to three years.⁷ That window gives you time to reconsider if the fees that show up on your paperwork don’t match what you were promised.

1
eCFR. 12 CFR Part 22 – Loans in Areas Having Special Flood Hazards
2
Consumer Financial Protection Bureau. What Fees Can My Lender Charge if I Take Out a HELOC
3
Federal Trade Commission. Home Equity Loans and Home Equity Lines of Credit
4
Consumer Financial Protection Bureau. What Should I Do if I Do Not Get a Closing Disclosure Three Days Before My Mortgage Closing
5
eCFR. 12 CFR 1026.40 – Requirements for Home Equity Plans
6
Office of the Law Revision Counsel. 15 USC 1635 – Right of Rescission as to Certain Transactions
7
Consumer Financial Protection Bureau. Right of Rescission