How much are closing costs on average?

Buyers typically pay 2 to 5 percent of the loan amount in closing costs (LendingTree's 2026 guide, using Urban Institute calculations from Fannie Mae data). On a $450,000 home with 20 percent down, the worked example prices out at $13,906 (3.09 percent of the price) before any seller help.

What is included in closing costs?

Four buckets: lender charges (origination, underwriting, appraisal, credit report), title and settlement (title insurance, title search, settlement fee, recording fees), government charges (transfer taxes, which range from zero to over 1 percent by state), and prepaids and escrow (prepaid interest, a year of homeowner's insurance, prepaid property taxes, and the initial escrow deposit). Prepaids are usually the biggest bucket.

Who pays closing costs: buyer or seller?

The buyer pays their own closing costs (2 to 5 percent of the loan); the seller pays theirs separately, typically 8 to 10 percent of the price on a $500,000 home ($40,000 to $50,000), driven by agent commission. The seller can also contribute toward the buyer's costs: Fannie Mae caps those contributions at 3 percent of the price when the down payment is under 10 percent, 6 percent with 10 to 25 percent down, and 9 percent above 25 percent down.

Can I roll closing costs into my mortgage?

Some of them. FHA loans finance the 1.75 percent upfront mortgage insurance premium into the loan ($4,813 on a $275,025 loan); VA loans finance the 2.15 percent funding fee ($9,675 on a $450,000 loan with zero down). Lender credits cover costs too, but they raise your rate. The cash fees (appraisal, inspection, transfer tax) stay at the table.

How can I lower my closing costs?

Shop the shoppable lines (title services are marked shoppable on the Loan Estimate), ask about lender credits, close near month-end to cut prepaid interest (15 days to 5 days saves about $691 in the worked example), compare at least three Loan Estimates, and negotiate seller concessions within the Fannie Mae caps. The CFPB requires your Closing Disclosure three business days before closing . Read every line of it.

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Form CL-33 · The Settlement Ledger

Closing Costs Calculator

The down payment is only half the check you write on closing day. This ledger prices the other half: every lender fee, title line, tax, and prepaid, plus the transfer tax for your state. It lands on the number that actually matters, the cash you bring to the table.

The purchase

Home price ($) The contract price, not the appraisal. Down payment (%) $90,000 down · $360,000 loan Loan type FHA and VA add financed fees; cash skips the loan lines. State transfer tax (buyer share) Transfer taxes range from zero to over 1% by state, and most are seller-paid. This is the buyer's share. Mortgage rate (%) Used only for the prepaid-interest line.

At the table

Seller concession (% of price) Fannie Mae cap for this loan: 6%. Earnest money already paid ($) Credited back at closing. Prepaid-interest days Days from closing to month-end. Closing near month-end cuts this line. Discount points One point = 1% of the loan, paid now to buy the rate down.

The fine print (typical values, editable)

Origination fee (% of loan) Title insurance (% of price) Annual property tax (% of price) Annual homeowner's insurance (% of price) Settlement / closing fee ($)

Closing costs, itemized $13,906 3.09% of a $450,000 price · $90,000 down, conventional

Cash to close $103,906 down payment + closing costs − credits · the check you actually write

The rule of thumb says $9,0002% $15,7503.5% $22,5005% Your itemized $13,906 lands inside the usual 2–5% band.

Within the usual range

LendingTree's 2026 guide puts buyer closing costs at 2 to 5 percent of the loan amount. Landing inside the band means the quote has no surprises hiding in it.

Model notes: transfer-tax rates are buyer-share estimates from published 2025–2026 state tables (see the state article); most states' transfer taxes are seller-paid or split by custom. FHA upfront MIP (1.75%) and VA funding fees (2.15% first use, 3.3% subsequent) are financed into the loan, not paid in cash, and shown separately. Seller-concession caps follow Fannie Mae interested-party-contribution limits. Prepaids use 12 months of insurance, 3 months of property tax, and a 2-month escrow cushion. Estimates only; your lender's Loan Estimate and Closing Disclosure are the real numbers. Figures are estimates, not financial advice.

Where the numbers come from

The model prices four buckets the way national data splits them (myKnowledgedock's 2026 breakdown, from Urban Institute and Fannie Mae figures): lender origination charges at 0.5 to 1 percent of the loan (default 0.75), settlement and title at 0.5 to 1 percent, taxes and government fees at 0.38 to 0.71 percent, plus prepaids and escrow. The worked default ($450,000, 20 percent down, 7 percent rate, US-average transfer tax) lands at $13,906, or 3.09 percent of the price, squarely inside LendingTree's 2-to-5-percent band and inside ClosingCorp's 2026 estimate of $6,000 to $12,000 in closing costs on a $400,000 home (roughly 1.5 to 3 percent before prepaids; this model's non-prepaid lines total $9,510, or 2.11 percent).

The cross-check that keeps the model honest is the published FHA example from ClosingCost.us: a $285,000 home, 3.5 percent down, Florida. Their itemized subtotal is $14,720 with a $4,813 upfront MIP financed into the loan. This model's FHA math prices the same scenario at $9,644 in cash closing costs (the difference is prepaid items and the seller-concession arithmetic) with the upfront MIP at $4,813 financed (1.75 percent of the $275,025 loan), matching their figure to the dollar.

Questions buyers ask at the table

How much are closing costs on average?: Buyers typically pay 2 to 5 percent of the loan amount in closing costs (LendingTree's 2026 guide, using Urban Institute calculations from Fannie Mae data). On a $450,000 home with 20 percent down, the worked example prices out at $13,906 (3.09 percent of the price) before any seller help.
What is included in closing costs?: Four buckets: lender charges (origination, underwriting, appraisal, credit report), title and settlement (title insurance, title search, settlement fee, recording fees), government charges (transfer taxes, which range from zero to over 1 percent by state), and prepaids and escrow (prepaid interest, a year of homeowner's insurance, prepaid property taxes, and the initial escrow deposit). Prepaids are usually the biggest bucket.
Who pays closing costs: buyer or seller?: The buyer pays their own closing costs (2 to 5 percent of the loan); the seller pays theirs separately, typically 8 to 10 percent of the price on a $500,000 home ($40,000 to $50,000), driven by agent commission. The seller can also contribute toward the buyer's costs: Fannie Mae caps those contributions at 3 percent of the price when the down payment is under 10 percent, 6 percent with 10 to 25 percent down, and 9 percent above 25 percent down.
Can I roll closing costs into my mortgage?: Some of them. FHA loans finance the 1.75 percent upfront mortgage insurance premium into the loan ($4,813 on a $275,025 loan); VA loans finance the 2.15 percent funding fee ($9,675 on a $450,000 loan with zero down). Lender credits cover costs too, but they raise your rate. The cash fees (appraisal, inspection, transfer tax) stay at the table.
How can I lower my closing costs?: Shop the shoppable lines (title services are marked shoppable on the Loan Estimate), ask about lender credits, close near month-end to cut prepaid interest (15 days to 5 days saves about $691 in the worked example), compare at least three Loan Estimates, and negotiate seller concessions within the Fannie Mae caps. The CFPB requires your Closing Disclosure three business days before closing . Read every line of it.

Closing Costs Calculator

Where the numbers come from

Questions buyers ask at the table

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