The down payment is only part of the cash you need to buy a home. Closing costs, the fees, taxes, insurance and prepaid items settled on closing day, typically add another 2% to 5% of the price. This closing costs calculator estimates them line by line, grouped into the same lettered sections as the Loan Estimate your lender must send you, and adds them to your down payment to show the total cash to close.
How to use the closing costs calculator
- Enter the home price, down payment and interest rate.
- Under lender charges, enter the origination fee, any discount points and flat underwriting or processing fees.
- Under third-party services, enter the appraisal and credit report, title insurance, the settlement fee, inspections, recording fees and any transfer tax you will pay.
- Under prepaids and escrow, enter yearly property tax and insurance, the days of prepaid interest and how many months of each the lender wants in escrow.
- Subtract any seller or lender credits.
How closing costs are organized
Since 2015, lenders have used the standardized Loan Estimate and Closing Disclosure forms set by the Consumer Financial Protection Bureau. The calculator follows their sections:
| Section | What it includes | Typical size |
|---|---|---|
| A. Origination charges | Lender fee, points, underwriting | 0.5%–1% of loan + points |
| B. Services you cannot shop for | Appraisal, credit report, flood check | $500–$900 |
| C. Services you can shop for | Title insurance, settlement or escrow fee, survey | 0.5%–1% of price |
| E. Taxes and government fees | Recording fees, transfer taxes | $100 to 2%+ of price |
| F. Prepaids | First-year insurance, prepaid interest | 1–2 months of payments |
| G. Initial escrow | Months of tax and insurance cushion | 2–6 months |
| H. Other | Home inspection, HOA transfer fees | Varies |
Prepaid interest covers the days from closing to the end of the month:
Worked example
A $400,000 home with 20% down leaves a $320,000 loan at 6.5%.
- A. 0.5% origination ($1,600) + $995 underwriting = $2,595
- B. Appraisal and credit report = $700
- C. Title insurance at 0.5% ($2,000) + $800 settlement = $2,800
- E. Recording fees = $150
- F. $1,800 insurance + 15 days × $56.99 interest = $2,654.79
- G. 3 months of tax ($1,200) + 2 months of insurance ($300) = $1,500
- H. Home inspection = $650
Total closing costs: $11,049.79, or 2.76% of the price. Cash to close: $80,000 + $11,049.79 = $91,049.79.
Ways to lower closing costs
- Compare Loan Estimates. Origination charges and title fees differ widely between lenders and title companies.
- Ask about lender credits. A slightly higher rate can come with a credit toward costs. That makes sense if you won’t keep the loan long. The mortgage points calculator shows the break-even in either direction.
- Negotiate seller concessions, especially in a slower market.
- Time the closing. Closing late in the month cuts prepaid interest, though your first payment still comes due about a month later.
- Look for assistance. Many state housing agencies offer closing-cost help for first-time buyers.
Plan your savings target with the down payment calculator, and see the monthly side in the mortgage calculator.
Estimates only. Fees, title rates and transfer taxes vary by state, county and lender. Your Loan Estimate and Closing Disclosure are the authoritative figures.
Frequently asked questions
How much are closing costs for a buyer?
Buyers typically pay about 2% to 5% of the purchase price, depending on the loan, the state and how much is prepaid into escrow. In this calculator's default example, a $400,000 purchase with 20% down comes to $11,049.79, or 2.76% of the price.
What are prepaids and escrow, and why are they so large?
Prepaids are costs paid in advance: usually the first year of homeowners insurance and the interest from closing day to the end of the month. The initial escrow deposit gives your servicer a cushion of a few months of property tax and insurance. This money pays your own bills rather than a fee, but you still need it in cash at closing.
Which closing costs can I shop for?
Section C of the Loan Estimate lists services you can shop for, mainly title insurance, settlement or escrow services and sometimes a survey or pest inspection. Lender charges in Section A can be negotiated, and comparing Loan Estimates from several lenders is the most effective way to lower them.
Can the seller pay my closing costs?
Yes, through seller concessions negotiated in the purchase contract, subject to your loan program's limits. Conventional loans allow 3% to 9% of the price depending on the down payment, FHA allows 6%, and VA allows 4% in concessions plus reasonable closing costs. Enter them as credits.
When will I get the official numbers?
Federal rules (the CFPB's TILA-RESPA Integrated Disclosure rule) require lenders to send a Loan Estimate within three business days of your application. You must receive a Closing Disclosure at least three business days before closing. Compare the two for changes.