How much are closing costs when you buy a house?
As people ask it
We're about to make an offer and I've budgeted for the down payment, but I have no idea how much closing costs will be. What should I expect to pay at the closing table?
The short answer
Plan for closing costs of about 2% to 5% of your loan amount, according to Freddie Mac. On a $360,000 loan, that is roughly $7,200 to $18,000, on top of your down payment. The exact amount depends on your state, lender, loan type and timing, and your Loan Estimate gives you an itemized number within three business days of applying.
Key takeaways
- Freddie Mac says closing costs usually run 2% to 5% of the loan amount, not counting the down payment.
- Your lender must give you a Loan Estimate within three business days of your application, with closing costs itemized by section.
- You must receive your Closing Disclosure at least three business days before closing so you can compare it to the Loan Estimate.
- Federal rules cap increases: many lender fees cannot rise at all, and certain third-party and recording fees cannot rise more than 10% in total.
- Sellers can pay some closing costs through negotiated credits, but each loan type limits how much; VA caps seller concessions at 4% of the home's reasonable value.
- Cash to close is different from closing costs because it also includes your down payment and subtracts deposits and credits.
In this answer
How much are closing costs? Freddie Mac says to expect about 2% to 5% of your loan amount. On a $360,000 mortgage, that works out to roughly $7,200 to $18,000. This money is due at closing on top of your down payment, so it belongs in your budget from day one.
Where you land in that range depends on your state’s taxes, your lender’s fees, your loan type, your insurance and even the day of the month you close. The good news is that you do not have to guess for long. Federal rules give you an itemized estimate early and a final version before you sign.
What are closing costs?
Closing costs are the fees and upfront charges needed to finish a home purchase and set up your mortgage. They include lender fees, third-party services like the appraisal and title insurance, government taxes and recording fees, and prepaid items such as interest, homeowners insurance and the starting balance of your escrow account.
The Consumer Financial Protection Bureau (CFPB) lists common examples: appraisal fees, tax service fees, title insurance, government taxes, and prepaid expenses such as property taxes, homeowners insurance and interest until your first payment is due.
How much are closing costs on a typical home?
Most buyers pay between 2% and 5% of the loan amount, according to Freddie Mac. The low end is more likely with modest taxes and few lender fees. The high end is more likely in states with large transfer taxes, or when you pay points or fund a big escrow account.
| Loan amount | 2% of loan | 5% of loan |
|---|---|---|
| $200,000 | $4,000 | $10,000 |
| $300,000 | $6,000 | $15,000 |
| $360,000 | $7,200 | $18,000 |
| $500,000 | $10,000 | $25,000 |
| $832,750 (2026 baseline conforming limit) | $16,655 | $41,638 |
This is a rule of thumb, not a quote. Your Loan Estimate is the number to plan around. If you are still setting your budget, read how much house you can afford and how much down payment you need together with this guide.
Why closing costs vary so much
A few items cause most of the swings:
- State and local taxes. Transfer and recording taxes differ widely by state, county and city.
- Title insurance. Prices and who pays for the owner’s policy vary by state and local custom.
- Points. Paying discount points for a lower rate can add thousands. See should you buy mortgage points.
- Prepaids and escrow. These depend on your tax bill, insurance premium and closing date.
- Loan type. Some loans carry their own upfront charges, like FHA’s upfront mortgage insurance premium or the VA funding fee.
What is included in closing costs?
Closing costs fall into labeled sections on page 2 of your Loan Estimate and Closing Disclosure. Sections A through C cover the cost of the loan itself. Sections E through H cover taxes, prepaid items, escrow and other costs tied to the purchase. Knowing the sections helps you spot which fees you can shop for.
According to the CFPB’s Closing Disclosure explainer, the main sections are:
- A. Origination charges: what the lender charges to make the loan, including any points.
- B. Services you cannot shop for: required services the lender picks, like the appraisal and credit report.
- C. Services you can shop for: required services you may choose yourself, often including title and settlement services.
- E. Taxes and other government fees: recording fees and transfer taxes.
- F. Prepaids: interest from closing to month end, and often your first year of homeowners insurance.
- G. Initial escrow payment: the starting balance of your escrow account for future taxes and insurance.
- H. Other: items such as an owner’s title policy or a home warranty you chose.
Prepaids and escrow are not really fees. They are bills you would pay anyway, collected upfront. Still, you need the cash at closing, so budget for them.
Who pays closing costs, the buyer or the seller?
The buyer usually pays most closing costs tied to the loan and purchase. The seller pays their own costs, such as paying off their mortgage. You can ask the seller to pay some of your costs through a seller credit, but each loan type limits the amount, and a credit often comes with a higher price.
The CFPB says buyers generally pay the costs of the transaction, though the contract or state law may shift some to the seller. It also points out that you may pay indirectly even when you don’t pay out of pocket. A seller credit usually comes with a higher purchase price, and a lender credit usually comes with a higher rate or a larger loan.
Seller credits, sometimes called seller concessions or interested party contributions, are capped by loan type. For example, the VA limits seller concessions to 4% of the home’s reasonable value. Conventional and FHA loans have their own caps, which can depend on your down payment, so ask your lender for your limit before you write the offer.
How do you find out your exact closing costs?
Your Loan Estimate gives you an itemized estimate within three business days of applying. Your Closing Disclosure gives you the final numbers at least three business days before closing. Compare the two documents line by line, and ask your lender to explain any change you don’t understand.
The CFPB says a lender must provide a Loan Estimate within three business days of receiving your application. It shows your estimated rate, payment and total closing costs. Getting Loan Estimates from more than one lender is the easiest way to compare fees, since lender charges vary.
Which fees can change before closing?
Federal rules in Regulation Z (12 CFR 1026.19) limit how much estimates can rise unless there is a valid change, such as a new loan amount or rate lock change:
| Tolerance group | Examples | How much it can increase |
|---|---|---|
| Zero tolerance | Fees paid to the lender, its affiliates or a broker; services you were not allowed to shop for; transfer taxes | Cannot increase |
| 10% cumulative | Recording fees; third-party services you shopped for using the lender’s list | The total cannot rise more than 10% |
| No limit | Prepaid interest, homeowners insurance, escrow amounts, services you chose that were not on the lender’s list | Can change if the estimate was made in good faith |
If a zero- or 10%-tolerance fee goes over its limit, the lender has to refund the difference. You must receive your Closing Disclosure no later than three business days before closing. For what happens on the day itself, read what happens at closing.
How can you lower your closing costs?
You can lower closing costs by comparing lenders, shopping for the services you are allowed to choose, negotiating seller credits, using lender credits or assistance programs, and timing your closing. Each method trades something, so check the total cost rather than one line.
- Compare Loan Estimates. Origination charges in Section A vary between lenders. Compare the totals, not just the rate.
- Shop for Section C services. The CFPB says you can often save by choosing title and settlement providers yourself.
- Negotiate seller credits within your loan’s limits.
- Consider lender credits. You get help with costs now in exchange for a higher rate. This fits best if you might move or refinance in a few years.
- Check assistance programs. Many state and local programs cover closing costs, not just down payments.
- Shop for homeowners insurance. The premium shows up in prepaids, and the CFPB encourages comparing insurers.
What to do next
Treat closing costs as part of the price of buying, and plan for them as soon as you start shopping. A clear estimate now prevents a scramble on closing day. These steps will turn the rough range into a real number you can count on.
- Budget 2% to 5% of your expected loan amount for closing costs, plus your down payment and a cash cushion.
- Get preapproved and ask for a sample fee sheet. Learn the steps in prequalification vs. preapproval.
- Request Loan Estimates from at least two or three lenders and compare Sections A through C.
- Ask your lender for your maximum seller credit before you make an offer.
- When your Closing Disclosure arrives, compare it with your Loan Estimate and question any increase before you sign.
Your result
Estimated closing costs$11,845
Your estimated closing costs are $11,845, about 2.96% of the price: $7,400 in loan and third-party fees plus $4,445 in prepaids and escrow.
- Closing costs as a share of the price
- 2.96%
- Loan and third-party fees
- $7,400
Showing an example with default numbers. Change any field to see your own result. The rate field starts at the 30-year fixed national average (7.4%, week of October 15, 2026). Use your own quote for a closer answer.
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More questions on this
Are closing costs based on the home price or the loan amount?
Freddie Mac describes them as 2% to 5% of the loan amount. Some items, like transfer taxes and owner's title insurance, are tied to the price, so your real total depends on both numbers.
Can I roll closing costs into my mortgage?
On a purchase, you usually cannot add most closing costs to the loan balance, but some loan-specific fees can be financed, such as FHA's upfront mortgage insurance premium or the VA funding fee. Lender credits and seller credits are the more common ways to reduce cash due at closing.
What is a no-closing-cost mortgage?
It usually means the lender covers closing costs with lender credits in exchange for a higher interest rate. You pay less upfront but more each month, so it fits best if you expect to sell or refinance within a few years.
Do sellers pay closing costs too?
Yes. Sellers pay their own costs, which often include agent commissions and payoff of their mortgage. Who pays items like transfer taxes depends on your contract and local custom or state law.
Why did my closing costs go up from the Loan Estimate?
Some items can change, such as prepaid interest, homeowners insurance, escrow deposits and services you picked on your own. Many lender fees cannot rise at all unless there is a valid change, so ask your lender to explain each increase in writing.
Is earnest money part of closing costs?
No. Earnest money is a good-faith deposit you make when your offer is accepted. It usually counts toward your down payment or closing costs, and it appears as a credit when your cash to close is figured.
How do I pay closing costs?
Usually by wire transfer or cashier's check, as your closing agent instructs. Always confirm wiring instructions by calling a phone number you already know is real, because closing scams target buyers in the days before closing.
Are closing costs tax-deductible?
Most are not. Qualifying points on a loan to buy your main home may be deductible if you itemize, but the IRS says fees such as appraisal, notary and note preparation fees are not deductible as interest. A tax professional can tell you what applies to you.
Sources
We link only to official and primary sources. “Checked” is the date we last confirmed each page.
- Closing your home purchase (opens in a new tab)Freddie Mac · Checked
- What fees or charges are paid when closing on a mortgage and who pays them? (opens in a new tab)Consumer Financial Protection Bureau · Checked
- What is a Loan Estimate? (opens in a new tab)Consumer Financial Protection Bureau · Checked
- Loan Estimate explainer (opens in a new tab)Consumer Financial Protection Bureau · Checked
- Closing Disclosure explainer (opens in a new tab)Consumer Financial Protection Bureau · Checked
- 12 CFR 1026.19, Certain mortgage and variable-rate transactions (Regulation Z) (opens in a new tab)Consumer Financial Protection Bureau · Checked
- VA funding fee and loan closing costs (opens in a new tab)U.S. Department of Veterans Affairs · Checked
- Topic no. 504, Home mortgage points (opens in a new tab)Internal Revenue Service · Checked
- Beware of mortgage closing scams (opens in a new tab)Consumer Financial Protection Bureau · Checked
How we wrote this answer
Researched and written by the Mortgage Advice Daily Editorial Team, checked against the sources listed above, and reviewed on October 18, 2026. We are not a lender and we are not paid by lenders.
This answer is general education, not financial, tax or legal advice. Rules, rates and program limits change, and your lender’s requirements may be stricter. For free one-on-one help, talk to a HUD-approved housing counselor.
