HELOC Fees Explained: What You are REALLY Paying

The Price of Admission

Lenders love to advertise "No Closing Costs!" but nothing in life is free. If you don't pay upfront, you usually pay later. Here is the breakdown of every fee you might encounter on your HELOC Loan Estimate.

1. Origination/Application Fees ($0 - $500)

This is the cost to process your paperwork. Many credit unions waive this to be competitive. Big banks might charge $250.

2. Appraisal Fee ($400 - $800)

The bank needs to know your home's value.
Pro Tip: Ask if they can use an "Automated Valuation Model" (AVM) or a "Drive-By Appraisal" instead of a full appraisal. This is often free or very cheap ($50).

3. Annual Fee ($50 - $100)

Just like a credit card, many HELOCs charge a yearly maintenance fee, regardless of whether you use the line or not. Look for lenders who waive this for the first year.

4. Inactivity Fee

The Silent Killer. Some banks charge you if you don't borrow money. If your balance sits at $0 for 12 months, they might ding you $50.

5. Early Closure Fee ($350 - $750)

The Trap. If the bank paid your closing costs (the "No Closing Cost" deal), they usually require you to keep the account open for 36 months. If you sell your house or refinance in year 2, you have to pay them back for those waived costs.

Top Lenders with No Fees

In 2026, credit unions (like PenFed or Navy Federal) and online fintech lenders (like Figure or Hitch) are the most likely to offer truly fee-free HELOCs.