HELOC Fees: What to Look For
Digital HELOCs have simplified fee structures compared to traditional bank products — but fees still vary meaningfully between programs. Understanding what you're paying matters when comparing total cost.
Origination Fee
A one-time fee charged at closing, typically expressed as a percentage of the line amount. Some programs charge this as a percentage of the initial draw rather than the full line. Texas has specific fee limitations under 50(a)(6) rules.
Annual Fee
A recurring fee charged each year the line is open. Some programs waive this fee in the first year or waive it entirely. Annual fees are typically modest on digital HELOCs.
Prepayment Penalty
A fee charged if you pay off and close the line within a certain period after origination. Some programs charge a prepayment penalty if the line is closed within 2–3 years. This matters if you plan to sell or refinance soon after opening the HELOC.
Third-Party Costs
Recording fees, title fees, and other third-party costs vary by state and property. Some digital programs cover these costs; others pass them through to the borrower.
Texas Note
Texas 50(a)(6) home-equity transactions have specific consumer fee limitations. The maximum consumer origination fee is generally 2% of the loan amount under current rules.
Fee structures for specific programs change frequently. Always review the current loan estimate or program disclosure for the exact fees that apply to your transaction.
HELOC guidelines change frequently. This content is educational and is not a loan approval, commitment or guarantee.