The headline interest rate on a HELOC is only part of the total cost. Lender fees, broker fees, and the decision about whether to pay them upfront or add them to the loan balance all affect what the borrower actually pays over the term. Understanding the full fee picture before committing is essential, because the gap between the headline rate and the true cost can be significant.

This guide breaks down every fee category involved in a UK HELOC, explains what each one covers, shows the cumulative impact in a worked example, and covers how to use the APRC (annual percentage rate of charge) to compare products on a like-for-like basis. All fee figures reflect typical market conditions at the time of writing and may vary between providers.

The full fee breakdown

The table below shows every fee category that may apply to a UK HELOC at the time of writing, who it is payable to, the typical range, and whether it can be added to the loan balance. This is the complete picture, not just the lender’s fees.

The first three rows (product fee, arrangement fee, and broker fee) are the fees that have the most impact on the total cost. The remaining rows are either zero on current products (annual fee, ERC), covered by the lender in most cases (valuation), or variable (legal costs). The sections below explain each of the significant fees in detail.

Lender fees: product fee and arrangement fee

The lender charges two separate fees for setting up the HELOC facility. Both are expressed as a percentage of the amount involved, but they are calculated on different bases and capped at different levels.

The product fee is calculated as a percentage of the total facility amount (the maximum the borrower could draw, not the amount they plan to draw). At the time of writing, the typical range is 2.0% to 2.6% of the facility amount, capped at £9,995. The exact percentage depends on the draw period length chosen: a longer draw period attracts a higher product fee. On a £50,000 facility at 2.3%, the product fee would be £1,150. On a £200,000 facility at 2.3%, it would be £4,600. On a £500,000 facility, the cap of £9,995 would apply.

The arrangement fee is calculated as a percentage of the loan amount and is capped at a fixed maximum. At the time of writing, the typical range is 6.7% to 7.8% of the loan amount, capped at £3,000. Because of the cap, this fee is effectively a flat fee for most borrowers: 6.7% of £40,000 is £2,680, which is under the cap, while 6.7% of £50,000 is £3,350, which exceeds the cap and is charged at £3,000. For facility amounts above approximately £45,000, the arrangement fee is effectively £3,000 regardless of the amount.

Both fees can be paid upfront at completion or added to the loan balance. Adding them is convenient but means the borrower pays interest on the fee amount for the remaining term, which increases the total cost. The section on adding fees to the balance below shows the impact in numbers.

Broker fees: the cost that is easy to miss

In the UK HELOC market, most borrowers access the product through a mortgage broker rather than applying directly to the provider. The broker charges a fee for this service, which is entirely separate from the lender’s product fee and arrangement fee. This broker fee is the cost that is most commonly overlooked when borrowers compare HELOCs, because it does not appear in the lender’s own rate or fee disclosures and is not always prominently displayed on broker comparison pages.

Broker fees vary significantly. At the time of writing, some brokers charge around 5% to 5.5% of the facility amount, while others charge up to 10% or more. On a £40,000 HELOC, a 5.5% broker fee is £2,200. A 10% broker fee on the same facility is £4,000. The difference between brokers on this single fee can be larger than the difference in lender fees across the entire market.

Two representative examples from UK broker comparison sites illustrate the total fee picture when broker fees are included. One representative example shows a £34,000 HELOC with a broker fee of £3,400 (10%) and a lender fee of £795, giving a total fee burden of £4,195 on a £34,000 facility. A separate representative example shows a £43,000 facility with a broker fee of £3,995 (approximately 9.3%) and a lender fee of £595, giving a total of £4,590. In both cases, the broker fee is the largest single cost item.

Borrowers should ask for the broker fee in writing before committing to an application, and should compare not just the headline rate but the total fee picture, including both lender and broker fees, across the options available. The APRC, which includes all fees, is the most reliable way to compare total cost. The guide to secured loan fees explained covers fee structures across the broader secured lending market.

Valuation, legal, and other costs

Beyond the lender and broker fees, a small number of additional costs may apply. In most cases, these are either zero or modest compared with the main fees.

The property valuation is carried out using an automated valuation model (AVM) in most cases, at no cost to the borrower. An AVM uses comparable sales data and property records to estimate the current value without a physical inspection. In a small number of cases where an AVM cannot produce a valuation (unusual property types, limited comparable data, or recent significant alterations), a physical RICS surveyor valuation may be required. The cost of a RICS valuation is borne by the borrower and typically ranges from £200 to £500 or more depending on the property value and location.

Legal and solicitor costs for registering the second charge on the property may apply. Some providers cover basic legal costs as part of the arrangement; others pass them to the borrower. The amount varies, but for a straightforward second charge registration, legal costs are typically modest. Checking whether legal costs are included in the lender’s fee or charged separately is worth clarifying before the application proceeds.

There are no annual fees, no account maintenance fees, and no early repayment charges on the HELOC products currently available in the UK. This means the fees are entirely front-loaded: the borrower pays them at setup and has no ongoing fee obligations beyond the interest on the drawn balance. This is different from some US HELOC products, which carry modest annual fees, and from standard UK secured loans, which may carry ERCs during a fixed-rate period. The guide to HELOCs in the UK vs the US covers the fee comparison between the two markets.

The impact of adding fees to the balance

Adding fees to the loan balance is convenient because it avoids the need to find several thousand pounds at completion. But convenience has a cost: the borrower pays interest on the fees for the remaining term of the HELOC, which can add significantly to the total amount repaid.

The decision about whether to pay fees upfront or add them to the balance depends on the borrower’s cash position. Paying upfront is cheaper over the term, but it reduces the cash available at completion. For borrowers who do not have the cash available, adding fees is a practical solution, but the long-term cost should be factored into the total cost comparison when deciding between products.

Using APRC to compare total cost

The APRC (annual percentage rate of charge) is the regulatory metric used for second charge mortgages, including HELOCs, in the UK. It includes the interest rate and all mandatory fees (product fee, arrangement fee, and any other lender charges), expressed as a single annualised percentage. This makes it the most reliable way to compare the total cost of different products on a like-for-like basis.

The headline interest rate, by contrast, includes only the interest charge. Two products with the same headline rate of 8% can have very different APRCs if one has higher fees than the other. The product with the higher fees will have the higher APRC, reflecting the higher total cost over the term. When comparing HELOCs, or comparing a HELOC with a standard secured loan, APRC is the metric that captures the full picture.

One important caveat: APRC is calculated on the basis of the representative example, which assumes the borrower holds the product for the full term. If the borrower plans to repay early (which is penalty-free on current UK HELOC products), the effective cost may differ from the APRC because the fees are front-loaded. A borrower who repays within two years bears the same fees as a borrower who holds for fifteen years, but spread over a shorter period. For short holding periods, the effective annual cost is higher than the APRC suggests. The guide to APR on secured loans covers how APRC calculations work in more detail.

Broker fees are not always included in the APRC calculation because they are not a lender charge. This means two borrowers using different brokers to access the same lender product will see the same APRC but pay different total costs because of the difference in broker fees. For a true total-cost comparison, the borrower needs to add the broker fee to the APRC-based cost when comparing options across different brokers. Asking each broker for the total cost of the facility, including their own fee, lender fees, and all other charges, is the most straightforward way to achieve this.

Frequently asked questions

Can I negotiate the fees?

There is typically limited scope to negotiate lender fees, which are set as part of the product terms. The product fee and arrangement fee are published percentages (or capped amounts) that apply to all borrowers on that product. However, broker fees may have more room for discussion. Brokers set their own fees, and some may be willing to adjust depending on the facility size, the complexity of the case, and competitive pressure from other brokers.

The most effective way to manage fee costs is to compare the total fee picture (lender fees plus broker fees) across multiple brokers before committing. A broker offering a slightly higher headline rate but a significantly lower broker fee may produce a lower total cost than a broker with a lower headline rate but a higher fee.

Are the fees refundable if I withdraw before completion?

This depends on the timing and the specific provider’s terms. In most cases, fees that have not yet been incurred (such as arrangement fees that are charged at completion) are not payable if the borrower withdraws before the facility goes live. Fees that have already been incurred (such as a RICS valuation fee paid to the surveyor) are typically non-refundable regardless of the outcome.

Broker fees vary in their refund policies. Some brokers charge nothing until completion; others require a partial upfront payment that may or may not be refundable. Clarifying the refund position on all fees before starting the application is worthwhile, particularly for borrowers whose circumstances may change during the process.

How do UK HELOC fees compare with US HELOC fees?

UK fees tend to be higher as a percentage of the facility than typical US closing costs. US closing costs are commonly in the range of 2% to 5% of the credit line, and several major US lenders waive closing costs entirely. US lenders often charge modest annual fees ($50 to $75) but rarely charge percentage-based broker fees because most US borrowers apply directly to lenders.

UK fees (lender product fee plus arrangement fee plus broker fee) can total 10% to 15% of the facility amount or more, though the lender fees are capped at fixed maximums which limits the total on larger facilities. The absence of ERCs on current UK products partially offsets the higher upfront cost for borrowers who repay early. The guide to HELOCs in the UK vs the US covers the full fee comparison.

Do fees apply to each drawdown or just at setup?

Fees are one-off charges at setup. Once the HELOC facility is live, individual drawdowns during the draw period do not attract additional fees. The borrower can draw, repay, and redraw within the facility limit without incurring new charges each time. This is a fundamental feature of the revolving credit structure: the fees cover the establishment of the facility, not the individual transactions within it.

If the borrower refinances at the end of the draw period (for example, by taking a new HELOC with a fresh draw period), the new product will have its own set of fees. These are treated as a new application, not as a continuation of the original facility. The guide to refinancing a HELOC covers the costs involved in refinancing.

What is the difference between the product fee and the arrangement fee?

Both are lender fees, but they are calculated differently and serve different purposes. The product fee is calculated as a percentage of the total facility amount and varies depending on the draw period length chosen (a longer draw period attracts a higher product fee). The arrangement fee is calculated as a percentage of the loan amount and is capped at a fixed maximum, making it effectively a flat fee for most facility sizes above a certain threshold.

In practice, the distinction matters most when comparing products with different draw period lengths, because the product fee changes while the arrangement fee is largely fixed (due to the cap). For a straightforward comparison, the total of both fees (plus any broker fee) is the relevant number, not the breakdown between them.

This article is for informational purposes only and does not constitute financial advice. Your home may be at risk if you do not keep up repayments on a mortgage or other debt secured against it. Fee ranges described reflect typical market conditions at the time of writing and may vary between providers and brokers. Fees can change. The APRC you are offered will reflect your individual circumstances. Actual outcomes will depend on your individual circumstances.