How to Negotiate Home Equity Loan Closing Costs and Save Big in 2025
Homeowners tapping into their equity with a home equity loan are often securing one of the largest financial products of their lifetime — second only to their mortgage. With the average U.S. homeowner sitting on more than $300,000 in equity, these loans can offer access to tens or even hundreds of thousands of dollars at rates far lower than credit cards or personal loans. But while most borrowers focus on securing a competitive interest rate, closing costs can quietly take a large bite out of the savings — unless you know how to negotiate.
Home equity loan closing costs typically range from 2% to 5% of the total loan amount. For a $200,000 loan, that could mean paying between $4,000 and $10,000 upfront. Fortunately, many of these fees are negotiable — and reducing them can put more of your equity to work where it matters most. Here’s how to approach the negotiation process with confidence and strategy.
Yes, You Can Negotiate Home Equity Loan Closing Costs
Many homeowners are surprised to learn that a variety of closing costs on a home equity loan aren’t set in stone. According to Nathan Young, founder of North Star Mortgage Network, “Reducing upfront expenses makes the loan more affordable, especially for those tapping into equity for renovations, debt consolidation, or major purchases. Paying less in fees means more of your home equity is actually going toward your goals — not into unnecessary costs.”
The key is understanding which fees are flexible and which are more fixed by external providers.
The Easier Fees to Negotiate
Several lender-controlled fees are ripe for negotiation:
Origination and Application Fees: These are charged for processing your loan. Ask your lender directly to waive or reduce them. If you’re a strong borrower or a returning client, many lenders will work with you.
Appraisal Fees: While typically set by appraisers, lenders sometimes mark them up. You can request to use a recent appraisal or choose your own appraiser if allowed.
Title and Escrow Fees: These vary by provider. Ask your loan officer to gather quotes from different title companies or request a discounted re-issue rate if applicable.
According to Nicollette Chapman, senior VP at housing data firm Zonda, “Borrowers will have the most negotiating power with lender-controlled costs like origination fees, discount points, and even application charges.”
The Harder Fees to Negotiate
Some closing costs are less flexible, often set by outside parties:
- Recording Fees: These are charged by your local government to make your loan official.
- Credit Report Fees: Typically a flat fee from credit agencies.
- Third-Party Appraisal Costs: If you can’t select your own appraiser, you may be stuck with whatever the lender’s preferred vendor charges.
Still, there may be creative ways to handle them. For example, Chapman notes that many fees can be rolled into your loan amount, reducing the need for large cash payments upfront — though this will slightly increase your long-term interest expense.
- How to Negotiate Effectively
Smart negotiation starts with preparation and comparison shopping. - Request Estimates from Multiple Lenders: Aim to collect offers from a federally insured bank, an independent mortgage company, and a mortgage broker. Your personal bank may offer loyalty pricing, and comparing a mix of lenders helps you get a clear picture of what’s reasonable.
- Ask for Fee Breakdowns: Go line by line through your loan estimate. If something looks inflated or unclear, ask for clarification — or a better deal.
Use Competing Offers to Your Advantage: If another lender is offering a lower fee structure or better rate, don’t be shy about showing that offer and asking your preferred lender to match or beat it.
Mortgage expert Mark Worthington of Churchill Mortgage advises, “The best way to be successful in negotiating home equity loan closing costs is to speak to more than one source. This allows you to compare the service and cost levels to find what best serves your needs.”
For the bold negotiator, there’s even a more aggressive approach. David Wickert, president of Accunet Mortgage, recommends including all lenders on one email thread and attaching their quotes — then asking who can improve their offer before a specific deadline. “It’s unconventional, but effective,” he says.
Negotiating your home equity loan’s closing costs can lead to meaningful savings and help you maximize the value of your loan. Focus your efforts on lender-controlled fees, shop around, and be ready to present competing offers.
Above all, remember that negotiation is about collaboration, not confrontation. “Ask questions. Push back — respectfully,” says Young. “A good lender will be transparent and work with you.”
And while you’re negotiating, stay patient. Closing on a home equity loan can take anywhere from two weeks to two months, and it’s worth investing the time up front to ensure you walk away with the best deal — and a loan structure that supports your financial goals for years to come.