Closing Cost Calculator

What are closing costs?

Closing costs are the fees and charges — separate from your down payment — that you pay to finalize a mortgage and transfer property ownership. They typically total 2–5% of the purchase price and are due at the closing table. On a $400,000 home, expect $8,000–$20,000 depending on your state and loan type.

The four categories

Lender fees. Origination charges (often ~0.75–1% of the loan), appraisal ($400–$700), credit report, and flood certification. If you buy discount points to lower your rate, those go here too.

Title & settlement. Owner's title insurance (protects your ownership claim), lender's title insurance (required), title search, and the settlement/escrow agent's fee. Title insurance alone can run 0.5–1% of the price.

Government fees. State and local transfer taxes plus deed recording fees. This is where states diverge most: Texas charges no state transfer tax, while Delaware charges 4% and Pennsylvania 2%.

Prepaids & escrow. Not fees, but money paid upfront: prepaid mortgage interest for the partial first month, plus initial deposits into your escrow account for property taxes and homeowners insurance (usually 2–3 months' worth).

FHA and VA differences

FHA loans require an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount. VA loans charge a funding fee of 1.25–3.3% (2.3% for first-time use with less than 5% down), though some veterans are exempt. Both can be rolled into the loan balance rather than paid at closing.

How to reduce closing costs

Negotiate seller concessions (common in buyer's markets), shop lenders and compare Loan Estimates line-by-line, ask about lender credits (accept a slightly higher rate for reduced upfront costs), and compare title insurance providers — you're allowed to choose your own in most states.

Worked example: how your state changes the bill

Lender and title fees are broadly similar across the country, but transfer taxes are set by each state and vary enormously — from nothing in Texas to 4% of the price in Delaware. To show the impact, we held every other input at the calculator's defaults — a $400,000 home, 20% down, conventional loan, no points, with owner's title insurance — and changed only the state.

In most states, total closing costs land in the typical 2–5% range. The outliers are driven almost entirely by transfer tax: a Delaware buyer pays roughly $16,000 more than a Texas buyer on the identical home, purely in state and county transfer taxes. This is why "closing costs are about 3%" is a dangerous rule of thumb — it can understate your cash-to-close by many thousands of dollars in a high-transfer-tax state. Select your actual state above, and remember that in some states transfer tax is customarily split with the seller.

Common mistakes to avoid

Closing costs surprise buyers because they're easy to underestimate. These are the frequent traps.

• Confusing closing costs with the down payment. They're separate. Your cash-to-close is the down payment plus closing costs — budget for both.
• Assuming a flat 3% everywhere. Transfer taxes make the real figure highly state-dependent. The same loan can cost 2.5% in one state and over 6% in another.
• Ignoring prepaid escrow. A large chunk of closing costs is prepaid property taxes and insurance funding your escrow account — money that's yours, but still cash you need at the table.
• Not shopping title and settlement services. In most states you can choose your own title company. The Loan Estimate lists which fees you can shop for; comparing them can save hundreds.
• Overlooking seller concessions. In a buyer's market, sellers often agree to cover part of closing costs. Loan programs cap how much, but it can meaningfully cut your cash needed.

Key terms explained

Transfer tax

A tax on transferring the property title, set by state and sometimes county. The single biggest source of variation between states.

Origination fee

The lender's charge for processing your loan, typically around 0.5–1% of the loan amount.

Title insurance

A one-time policy protecting against ownership disputes. Lenders require their own policy; an owner's policy is optional but common.

Prepaids & escrow

Upfront property taxes, homeowners insurance, and prepaid interest collected at closing to fund your escrow account.

Cash to close

The total you bring to closing: your down payment plus all closing costs.

Frequently asked questions