The one-paragraph answer
For a typical borrower in July 2026 — 720+ FICO, 80% CLTV, primary residence — a HELOC costs $0–$500 upfront and then 7.43% APR (national average per Bankrate) on the drawn balance. On a $50,000 draw held for 5 years, total interest runs roughly $18,000–$20,000 depending on how fast you pay it down. Cash-out refi on the same amount would cost more because the refi rate applies to your entire mortgage balance, not just the new cash.
Every fee category, explained
Upfront (one-time)
| Fee | Typical amount | Notes |
|---|---|---|
| Application fee | $0–$100 | Most lenders don't charge this anymore |
| Origination fee | $0–$500 | Bank HELOCs often waive; non-bank fintechs charge more |
| Appraisal | $0–$650 | Waived when AVM works; full appraisal for high-value or complex properties |
| Title search / insurance | $0–$400 | Often paid by lender on HELOCs under $250K |
| Recording | $50–$150 | State/county-dependent |
| Flood determination | $15–$30 | Almost always required |
| Notary | $0–$100 | Often included |
| Typical all-in upfront | $0–$500 | For primary-residence bank HELOCs |
| Investor / rental property HELOC | $500–$2,500 | Fewer lenders, higher fees |
Ongoing
| Cost | Typical amount | Notes |
|---|---|---|
| Interest (variable rate) | Prime + 0.00% to +2.50% | Prime = 6.75% in July 2026. Typical HELOC rate = 6.75%–9.25% |
| Annual fee | $0–$100 | Often waived in year 1; Third Federal charges nothing |
| Inactivity fee | $0–$100 | If you don't draw at least $100–$500 annually |
| Fixed-rate lock fee | $0–$100 per lock | If you convert a portion of the balance to fixed rate |
If you close the HELOC early
| Fee | Typical amount | When it applies |
|---|---|---|
| Early termination fee | $300–$500 or up to 2% of line | Usually if closed within 3 years of opening |
| Reimbursement of waived closing costs | Actual cost lender paid | Common on "$0 closing cost" HELOCs |
Total 5-year cost estimates by loan size
Assumptions: interest-only during 10-year draw period, HELOC rate held constant at 7.43%, no early termination.
| Draw amount | Monthly interest-only payment | Total interest over 5 years | Total cost incl. $0 upfront |
|---|---|---|---|
| $25,000 | $155 | $9,288 | $9,288 |
| $50,000 | $310 | $18,575 | $18,575 |
| $75,000 | $464 | $27,863 | $27,863 |
| $100,000 | $619 | $37,150 | $37,150 |
| $200,000 | $1,238 | $74,300 | $74,300 |
Real-world cost is usually lower because most borrowers pay down principal during the draw period. Even $100/month toward principal on a $50K balance cuts total interest by roughly $2,500 over 5 years.
How to compare HELOC costs across lenders
Ask every lender for the same three numbers:
- Full APR at your exact CLTV and FICO. Not the promotional rate. The rate they'd actually give you.
- Total upfront cost, itemized. Includes appraisal, title, recording, notary, origination — all of it. If they can't produce this in writing, walk.
- All ongoing fees (annual, inactivity, lock). Multiplied out over the 10-year draw period. A "cheap rate" with a $100 annual fee is $1,000 over the life of the line.
HELOC vs. cash-out refinance cost comparison
On $50,000 in cash accessed from a home with a $400,000 existing mortgage at 4.5%:
| Cost bucket | HELOC ($50K draw) | Cash-out refi ($450K new loan) |
|---|---|---|
| Upfront closing costs | $0–$500 | $9,000–$22,500 (2–5% of loan) |
| Interest rate | 7.43% on $50K | 6.79% on $450K |
| Year 1 interest cost | ~$3,715 | ~$30,555 (of which $27K would have existed without refi) |
| Interest attributable to the $50K cash | ~$3,715 | ~$3,395 |
| Interest on the "kept" existing balance | Still at old 4.5% ($400K × 4.5% = $18,000) | Now at new 6.79% ($400K × 6.79% = $27,160) |
| Net year 1 cost of accessing $50K | $3,715 | $3,395 + $9,160 refi penalty = $12,555 |
The math shifts if your existing rate is high (above 7%) — then the cash-out refi improves your first mortgage rate too and can win. But for anyone with a rate below 5%, HELOC is almost always the cheaper way to access modest amounts of equity.
Free or low-fee HELOC lenders as of July 2026
- Bank of America — $0 closing costs on HELOCs under $1M
- Third Federal Savings & Loan — $0 closing costs, $0 annual fee, but only in 28 states + DC
- PenFed Credit Union — $0 origination, appraisal covered
- Most credit unions — Highly variable; ask
- US Bank — $0 closing costs when you set up autopay
Bank of America and Third Federal are the two most commonly-cited $0 closing cost options. For most borrowers, one of these will be competitive on rate too.
How to get your exact HELOC cost estimate
Send me your home value, existing mortgage balance, and rough FICO. I'll come back within one business day with the 3 lenders in my network that would fund your specific scenario, with itemized costs for each.
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