Home Equity Loan and HELOC Closing Costs (2026): The Full Fee Breakdown
Closing costs are the second most important factor after rate, and the most misrepresented. HELOCs often advertise "no closing costs" while hiding a first-draw origination fee of 4-5%. Here is the full picture.
HEL vs HELOC: Cost Overview
Home Equity Loan
2-5%
of loan amount
On a $50,000 HEL: $1,000 - $2,500
Some lenders (Discover) offer no-closing-cost HELs at a slightly higher rate.
HELOC
Often $0
at closing... but check first-draw fees
Figure / Aven: 4.99% / 4.9% first-draw fee
On a $30k first draw: $1,470-1,497. Non-obvious cost buried in fine print.
Itemised Fee Table
| Fee | Typical Range (2026) | Note |
|---|---|---|
| Appraisal | $400-700 (full); $150-300 (AVM) | Traditional lenders require full appraisal. Digital lenders may use AVM. |
| Origination fee | 0.5-1.5% or flat $500-1,500 or none | Varies widely by lender. Always ask explicitly. |
| Credit report | $30-120 | Rising 25-400% per CFPB data. Budget toward the high end in 2026. |
| Title search | $75-200 | Required in most states to confirm lien position. |
| Title insurance (lender policy) | $100-600 | Covers lender against title defects. Required by most lenders. |
| Attorney / doc prep | $100-400 | Required in attorney-closing states: NY, GA, SC, MA, DE, CT, and others. |
| Notary | $50-200 | Remote online notary may be available via digital lenders. |
| Flood certification | $10-30 | Required by lenders in FEMA flood map areas. |
| Recording fee (county) | $30-200 | Varies significantly by state; NY and FL are highest. |
| Annual fee (HELOC only) | $0-99 per year | Ongoing; charged even on undrawn balance. |
| Inactivity fee (HELOC only) | $50-100 per year | Some lenders charge if line is undrawn for 12+ months. |
| Early closure fee (HELOC only) | $350-750 or 1-3% | Charged if you close the line within first 3 years. |
The First-Draw Fee Gotcha
How Figure and Aven advertise "no closing costs" while charging $1,000-1,500
Figure charges up to 4.99% as an origination fee on your initial draw. Aven charges 4.9% as a first-draw fee. Neither is a traditional closing cost (no title, no appraisal), but the economic effect is identical: you pay upfront to access your line.
First draw: $30,000
Aven 4.9% first-draw fee: $1,470
Figure 4.99% origination on $30k: $1,497
Bethpage no-closing-cost HELOC on same $30k first draw: $0
The fee applies only to the first draw, not to subsequent draws within the credit limit. If you need the speed and digital experience of Figure or Aven, price in this fee before comparing their advertised APR to a traditional lender.
No-Closing-Cost HELOCs: What Is the Catch?
Bethpage / FourLeaf, Bank of America, Discover, and Third Federal genuinely do offer HELOCs and HELs with no or minimal closing costs. The catch is usually one of:
- !Rate premium: 10-25bp higher rate to compensate for waived costs. Worth it on shorter holds; not worth it over 10+ years.
- !Clawback clause: If you close the line within 3 years, you repay the waived costs. The waiver is conditional.
- !Minimum qualification: Some waivers require a minimum credit score (720+), LTV cap (80%), or relationship status with the bank.
- !Loan amount cap: Bethpage covers costs on lines up to $500k. Discover's no-cost HEL caps at $300k. Above those amounts, costs apply.
Prepayment Penalties
| Product | Typical Policy | Lenders with Penalty |
|---|---|---|
| HEL prepayment | Most lenders: none. Some charge 1-3% within first 24-36 months. | Some regional credit unions, community banks |
| HELOC early closure | Many lenders: flat $350-750 or 1-3% if closed within first 3 years. | Citizens, PenFed, TD Bank (confirm before signing) |
| No closure fee | No penalty for early closure. | Bank of America, Discover |
Always confirm prepayment and closure terms in writing before signing. Ask specifically: "Is there an early termination fee?" and "Is there a prepayment penalty?"
Reducing Closing Costs: A Checklist
- Ask each lender for a no-closing-cost quote and compare the rate premium vs upfront savings
- Get 3 competing quotes -- competition reduces origination fees more than any other tactic
- Ask about relationship discounts if you bank with the institution
- Negotiate origination fees -- they are not fixed
- Check your state for mortgage recording tax (NY, FL can add thousands)
- If using a digital lender, compare their first-draw fee to traditional closing costs at your draw amount