Closing costs calculator

Estimate what you'll owe at closing — then split it into the true cost of the transaction and the prepaids you'd owe with or without the sale. Real rates, no single scary number.

How the math works

Closing costs run 2% to 5% of the loan amount — the range the Consumer Financial Protection Bureau quotes, and the one most calculators collapse into a single figure. This one keeps the range and then does the part the others skip: it separates the money that pays for the transaction from the money that pre-funds bills you already owned.

The total is a share of the loan, not the price, so a bigger down payment shrinks it. The prepaids bucket is built from real obligations: the first year of homeowners insurance, an escrow cushion the servicer holds against future tax and insurance bills, and daily interest from the closing date to the first payment. The calculator uses a two-month cushion — the most a servicer may hold under the federal escrow rules (RESPA) — and 15 days of prepaid interest. Whatever is left after the prepaids come out is the true cost of doing the deal: origination, appraisal, title, recording, and any transfer tax.

Worked example

Take the national median single-family home in the fourth quarter of 2025: $414,900. Put 20% down — $82,980 — and the loan is $331,920. Estimate total closing costs at 3% of the loan, the middle of the 2%–5% range. That's $9,957.60, or about 2.4% of the purchase price.

Now open it up. Property tax at the U.S. average effective rate of 0.89% is $3,692.61 a year on this home; homeowners insurance runs the national average of $3,303. So the prepaids are the first year of insurance ($3,303), a two-month escrow cushion on tax and insurance ($1,165.94), and 15 days of interest at 6.85% ($934.38) — $5,403.31 in all.

That leaves $4,554.29 in true transaction fees. Read the headline number as a single "cost of buying" and you've overstated the extra money by more than half: 54% of the bill is insurance and escrow you'd fund whether you bought this month or moved in a year ago. The prepaids don't vanish — you owe them — but they don't scale with the fee percentage either. They're a fixed real-world obligation wearing a closing-cost label.

When this calculator is wrong

A percentage-of-loan estimate is a planning tool, not a quote. The binding document is the Loan Estimate your lender must send within three business days of your application; the numbers below are where the estimate drifts from it.

• Transfer taxes swing the fee side hard. Some states and cities charge a deed or mortgage-recording tax measured in whole percentage points of the price; others charge almost nothing. Two identical loans can differ by thousands on this line alone, and a flat percentage can't see it.
• Prepaids depend on timing. Prepaid interest is charged from the closing date to the end of the month, so a closing on the 2nd costs far more interest than one on the 28th. Property-tax proration can land as a charge or a credit depending on when the seller last paid.
• It assumes you finance. An all-cash purchase has no lender fees, no prepaid interest, and no escrow — closing costs collapse to title, recording, and transfer tax. The loan-percentage frame doesn't apply.
• Seller credits and lender credits aren't in it. A seller concession or a lender credit taken in exchange for a higher rate can move real dollars off your side of the table. Those are negotiated per deal, not predictable from a percentage.

What to do with the result

Once the Loan Estimate arrives, treat it as three piles, not one. The government charges — recording fees, transfer tax — and the prepaid escrow are fixed; there's nothing to shop. The appraisal is set by the lender. But the Loan Estimate flags a third group, "services you can shop for" — chiefly title services and lender's title insurance, plus any survey or pest inspection. You are not required to use the title company the lender names, and premiums for identical coverage vary by hundreds or thousands of dollars between providers. Origination and application fees are negotiable too, especially if you hold a competing Loan Estimate.

So the move is: get two or three Loan Estimates, line up Section C side by side, and shop the title. Don't waste effort haggling the recording fee — it is what it is. Put the energy where the numbers actually move, and don't let a prepaid insurance premium talk you out of a house you can otherwise afford.

Common questions

How much are closing costs on a $400,000 house?

At 20% down the loan is $320,000, and closing costs run 2% to 5% of that — roughly $6,400 to $16,000. Where you land inside the range depends mostly on your state's transfer tax and title fees, and on how much prepaid escrow the closing date triggers.

Are closing costs on top of the down payment?

Yes. The down payment buys equity in the home; closing costs pay the lender, the third parties, the government, and the first escrow deposit. Budget for both. On the median-priced home above, that's an $82,980 down payment plus roughly $9,958 to close.

Can you negotiate closing costs?

Some of them. Lender origination fees and the "services you can shop for" on the Loan Estimate — title, survey, pest inspection — are negotiable or shoppable. Government recording fees, transfer taxes, and prepaid escrow are fixed by law or contract and won't move.

Can closing costs be rolled into the loan?

Sometimes. A refinance often lets you finance them; a purchase usually doesn't, though a lender credit can cover them in exchange for a higher rate, and a seller concession can shift them to the seller. Each of those trades an upfront cost for a longer-run one, so run the trade before taking it.

Do buyers or sellers pay closing costs?

Both, on different line items. Buyers cover loan-related fees, the appraisal, lender's title insurance, and prepaid escrow. Sellers typically cover the real-estate commission and, in many states, the owner's title policy and transfer tax. Who pays which transfer tax is set by local custom and by the contract.