Home Equity Loan Rates for February 2024
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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Much are Home Equity Loan Closing Costs?

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Content was accurate at the time of publication.

Tapping your home equity to remodel your kitchen or consolidate your credit card debt can be a great option — but don’t forget about closing costs.

Home equity loan and home equity line of credit (HELOC) closing costs can range from 2% to 5% of your loan amount. According to a recent LendingTree study, the average homeowner borrowed just over $83,000 with a home equity loan, which would equate to $1,600 to $4,000 in closing costs.

But with a little extra comparison shopping you may be able to find a lower — or even no-cost — option that’ll leave more dollars in your pocket.

You should budget 2% to 5% of your home equity loan amount for closing costs. Lenders follow the same process to approve a home equity loan as they do a regular mortgage. They will:

  • Check your home’s value and usually order an appraisal
  • Run your credit report
  • Verify your income
  • Check your title report for current liens
  • Prepare your closing documents

Here’s a breakdown of what each fee is for and how much you’ll pay:

Appraisal fee

 How much it costs: $300 to $400, if your lender needs a full appraisal report

A home appraisal is a report that provides your lender with a professional estimate of your home’s value. Most lenders cap your loan-to-value (LTV) ratio (the percentage of your home’s value being financed by your loan(s) at 85% — which means, in most cases, you can’t borrow all of your home’s equity.

Some lenders use automated systems or only require driveby appraisals that cost less and don’t involve inviting someone inside your home.

Credit report

 How much it costs: $50 to $80

Home equity loan requirements for credit scores are higher than for a traditional mortgage, so you’ll need to pay for a credit report. Aim for at least a 780 score to increase your chances of receiving the best interest rate at the highest LTV ratio.

Document preparation and attorney fees

 How much it costs: $95 to $250

There may be a fee for preparing the legal documents related to your loan. This may also be called a set-up fee or application fee.

Loan origination fee

 How much it costs: Typically 1% of your loan amount or a flat fee set by the lender

You may pay an origination fee to the loan officer, underwriter and other people involved with your loan. It may be a flat fee or a percentage of your loan amount.

Notary or signing fee

 How much it costs: $50 to $250

To avoid mortgage fraud, lenders require you to sign your documents with a notary or signing service. Their job is to verify your identity and make sure the paperwork is correctly signed.

Title search and title insurance

 How much it costs: 0.5% of your loan balance for title insurance and up to $325 for title search costs

Because a home equity loan is secured by a lien against your home, lenders check your title to make sure there aren’t any past-due taxes, judgments or other ownership issues. You’ll also need title insurance to cover the home equity loan amount.

A home equity line of credit (HELOC) is like a credit card that’s secured by your home. You may pay between 2% and 5% of your credit line amount toward the same types of fees charged on a home equity loan (such as credit report, origination and appraisal), if the lender charges any fees at all. Many banks and credit unions offer no-cost HELOCs if you already bank with them and agree to have the monthly payments automatically deducted from your checking or savings account.

Unlike a home equity loan, you can use and reuse your credit line during a set time called a draw period. That flexibility comes with ongoing costs and fees, however. You may even have to pay a fee if you close out your credit line too soon.

Be on the lookout for ongoing HELOC costs including:

Annual fees

 How much it costs: $60 to $100

You may be stuck with an annual membership fee, even if you never use your line of credit. The amount can vary depending on your bank.

Inactivity charges

 How much it costs: $5 to $50

Lenders make their income on interest charged — and if you don’t use your credit line, they don’t make any money. As a result, they may charge you an inactivity fee. If you don’t have immediate plans to use your HELOC, avoid opening one that requires this type of fee.

Early termination fees

 How much it costs: Up to $500 or 2% of your loan balance

Many lenders will require you keep your HELOC open for a specific number of years (usually two or three). If you close your account too early, your lender may charge you an early termination or cancellation fee that’s either a percentage of your loan amount or a flat fee.

Minimum withdrawals

 How much it costs: $15 to $100

You may be required to take out a minimum amount when you close on your HELOC. If you can’t drop this requirement, set aside the funds for a future goal or just pay off the balance once you receive the cash.


Ask about fixed-rate HELOCs

HELOC rates are usually variable, which could make your payments unaffordable — especially during the final repayment period. Your lender may offer an option to convert your HELOC to a fixed interest rate. There may be additional fees to make the switch, so double-check with your lender if your terms still aren’t clear after reviewing your HELOC paperwork.


1. Borrow less

Home equity loan fees are often charged based on a percentage of your loan amount. The less you borrow, the less you’ll pay in closing costs. Avoid the temptation to use your home like an ATM — if you borrow more than you can afford to pay back, you could lose your home to foreclosure.

2. Find a no-closing-cost home equity lender

You may get an incentive if you take out a home equity loan or HELOC with your local bank. Make sure you understand the fine print, especially when it comes to any fees that you:

  • Pay each year
  • Pay if you close out the loan
  • Pay for not using the credit line

3. Take the autopay option

Lenders often waive home equity closing costs if you’re willing to let them manage your payments electronically from your account. An added bonus: You may get a discounted interest rate, which could save you a bundle in interest charges over the life of your home equity loan.

4. Shop, shop, shop

Not all home equity loans are created equal — there are lenders that specialize in high-LTV-ratio home equity loans, while others cater to borrowers who want fast closings or large loan amounts. Check out our roundups of the best home equity loan lenders and best HELOC lenders before you make a decision.

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