Mortgage closing costs: What are they, and how much will you pay?

What are closing costs?

Mortgage closing costs include expenses related to applying for the loan and finalizing the real estate sale. Some of the costs are related to the property itself, while others are related to the mortgage lender’s services and the paperwork involved in the transaction.

Homebuyers typically pay most of these costs all at once on closing day. However, certain types of loans may allow you to roll the closing costs into your mortgage — which reduces your upfront outlay but increases your interest payments over time.

How much are closing costs?

Mortgage closing costs typically total about 2% to 5% of your total loan amount. For a $350,000 loan, for example, closing costs might range from $7,000 to more than $17,000.

According to a 2025 report from Lodestar, a closing cost data provider, closing costs for a borrower buying a single-family home in the U.S. average $4,661. (Keep in mind that is amount does not include real estate agent commissions.) The average closing costs for a refinance are lower at $2,403.

The total amount you’ll pay in closing costs depends on key factors like the price of the home. But it can also depend heavily on the home’s location: Costs vary widely across the country, partly due to state and local tax laws.

For example, the Lodestar data shows that homebuyers in Washington, D.C. paid the highest average closing costs for a purchase loan, at $17,545. New York and Delaware came in second and third, respectively, with average closing costs of more than $13,000 and more than $12,000. The states with the lowest average closing costs were Missouri ($1,740), Iowa ($1,640) and South Dakota ($1,551). Click the arrow below for a list of average closing costs for each state in the U.S.

• Average closing costs by state

Who pays closing costs?

While the buyer tends to pay many closing costs, the seller is responsible for paying some, too. Buyers can also try to negotiate with the seller to cover some of their costs, called “seller concessions.”

But there can be limits on seller concessions, depending on the buyer’s loan type. If you are purchasing a property with a conventional loan, you may negotiate up to 9% of the purchase price or appraised value, whichever is lower. FHA loans and USDA loans allow for up to 6%, while VA loans have a maximum of 4% total. Jumbo loans vary based on the lender.

Closing costs paid by the buyer

What is included in closing costs when you’re buying a home? Here are some of the fees you can typically expect to pay:

• Appraisal fee: This covers the cost for a licensed appraiser to determine the home’s value. The average appraisal fee for a single-family home is about $350, according to Angi. While this is considered a closing cost, you typically pay it well before closing day.
• Attorney fee: You may choose to use an attorney during your closing, or your state may require one. Their legal fees will be part of your closing costs.
• Credit check fee: If you’re financing a home purchase, your mortgage lender will want to check your credit score and report. The fee associated with doing so will likely be passed on to you.
• Discount points: By purchasing discount points (also called mortgage points), you can lower your mortgage rate. You’ll usually pay 1% of the loan principal for a 0.25% rate reduction.
• Origination fee: Many lenders charge a fee for originating the loan, which is generally 0.5% to 1% of the amount you’re borrowing. This fee might include other costs, such as an application fee and underwriting fee.
• Per-diem interest: The per-diem interest rate on a mortgage is the daily interest that’s charged between the closing date and the start of the billing cycle.
• Prepaids: Your lender may require a year of advance insurance and property tax premiums to be held in escrow. If your property is located in a community with a homeowners association, you may have to prepay a certain amount of HOA fees at closing, too.
• Property survey fee: Your lender may require this to confirm that your property boundaries match the title. The cost depends on the property size, the survey type and your location.
• Real estate agent commissions: The buyer’s agent and the seller’s agent each typically earn around 2.5% or 3% of the home’s sale price. The buyer and seller might each pay their own agent, or a deal may be reached where the seller pays them both.
• Recording fee: This fee goes to a government agency that records the real estate transaction and makes it a public record. It’s often around $125.
• Title insurance policy: Lenders require borrowers to obtain title insurance in case problems arise with ownership after the sale. This policy protects the lender, and the cost is usually about 0.5% of the amount of the mortgage. You may also buy your own title insurance for an additional cost.
• Title search fee: Unless you’re buying a new construction home, your lender will have a title company search property records to ensure there aren’t any issues with the title of the home, such as a tax lien. The fee for a title search is typically around $200.
• Transfer tax: Many states impose a transfer tax when real estate changes hands. The amount can vary widely. Often, the seller pays this tax, but in some places, the cost is shared with the buyer.

Closing costs paid by the seller

If the home is in a state that charges transfer taxes, the seller will often — though not always — cover that cost. The seller also pays some of the same fees buyers do, such as legal fees and prorated property taxes. They will also cover any seller concessions they agree to. In addition, sellers who use a real estate agent will pay that agent’s commission fee, and they may also agree to pay some or all of the buyer’s agent’s fee as well (who pays whom will be spelled out in the purchase agreement).

How to lower your closing costs

You likely can’t get away with not paying any closing costs, but there are ways you can lower the amount. Here are a few ways to reduce closing costs:

• Pay in cash: Most of a homebuyer’s closing costs are associated with getting a mortgage, so if you don’t need a loan, you don’t pay those fees.
• Look for lenders that offer discounts: Consider working with a mortgage lender that doesn’t charge an origination fee or that’ll offer you a discount. If you’re getting your mortgage at your bank, you can also try asking for a discount or fee waiver, since you’re already a customer.
• Apply for down payment assistance: Explore down payment assistance and grants that can help cover closing costs, particularly if you’re a first-time homebuyer.
• Use a no-closing-cost loan: Don’t let the name fool you — you’ll still pay closing costs with a no-closing-cost loan. But instead of paying them upfront, and having to pay that amount now, you’ll finance them with your mortgage and pay interest on them, or pay a slightly higher interest rate.
• Negotiate seller concessions: To encourage a sale, a seller might agree to pay some of your costs.
• Shop around when possible: You’re allowed to shop for certain closing costs, like title insurance, title searches and home appraisals. Comparing pricing where possible can help you reduce your costs.

FAQ

• How can I budget for closing costs?

• When are closing costs paid?

• How long does the closing process take?

Additional reporting by Lara Vukelich