Closing Costs Calculator
Estimate total closing costs for home purchase
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What the defaults come to
A $300,000 purchase with 20% down, a 6.5% rate and no discount points comes to roughly $5,950 in closing costs — about 2% of the purchase price.
Closing costs are not one fee but a stack: title insurance, appraisal, origination, recording and escrow deposits, each charged by a different party.
Estimating closing costs
Closing costs are usually quoted as a percentage of the purchase price:
Closing costs = Purchase price × Cost rate
On a $400,000 home, 3.5% works out to $400,000 × 0.035 = $14,000.
| Purchase price | 2% | 3.5% | 5% |
|---|---|---|---|
| $300,000 | $6,000 | $10,500 | $15,000 |
| $400,000 | $8,000 | $14,000 | $20,000 |
| $500,000 | $10,000 | $17,500 | $25,000 |
The 2–5% band covers lender fees, title, appraisal and prepaid taxes and insurance. Related: FHA loan and mortgage guides.
How the estimate is built
On a $300,000 purchase with $240,000 borrowed:
- Title insurance ≈ 0.5% of price = $1,500.
- Appraisal ≈ $500 flat.
- Origination ≈ 0.5% of the loan = $1,200.
- Recording, escrow and settlement ≈ $1,750.
- Prepaid escrow deposits ≈ $1,000 for taxes and insurance.
- Discount points = 0 because none were entered.
Total ≈ $5,950. Points are the one line that scales directly with the loan: one point is 1% of $240,000, or $2,400, and typically buys a rate reduction of about 0.25%.
Worked example with points
Two points on the same loan add $4,800 to the cash needed at closing, taking the total to about $10,750. The payment falls by roughly $35–40 a month on a 30-year loan, so the break-even is around ten years — worth it only if you stay that long.
Which costs are negotiable
- Origination and lender fees. Shop at least three lenders; the spread on the same loan is routinely 0.5% of the balance.
- Title insurance. Request the simultaneous-issue or reissue rate, which can cut the premium substantially on a refinance.
- Owner’s title policy. Sometimes paid by the seller — check the contract before budgeting for it.
- Escrow deposits. Not a fee at all, but cash you must bring; it is refunded through the escrow account over the year.
What the estimate leaves out
Transfer taxes, attorney fees in some states, HOA capital contributions and any repairs negotiated after inspection are outside the figure and can add several thousand dollars. The Loan Estimate form from the lender is the document to compare against, line by line.
Frequently Asked Questions
Why ~2% of the price rather than the 3–5% often quoted?
Because this estimate includes the main third-party and lender fees but not transfer taxes, attorney fees or prepaid interest, which vary by state and can add another 1–3%.
How much is one discount point?
One percent of the loan amount — $2,400 on a $240,000 loan here. It usually lowers the rate by about 0.25%, and the break-even is roughly eight to ten years.
Can closing costs be rolled into the loan?
Sometimes, through a higher rate or a lender credit, but not always and not above the loan-to-value limit. Ask for a no-cost or lender-paid comparison before choosing.
Are escrow deposits a fee?
No. They are prepaid taxes and insurance held in escrow to cover the first bills, and they are spent on your behalf rather than kept by the lender.
Which closing costs are negotiable?
Lender fees and title premiums are the most negotiable. Transfer taxes and recording fees are set by government and are not. Shopping three lenders is the single largest saving available.
How much cash should I bring to closing?
The down payment plus these costs: on this purchase that is $60,000 plus about $5,950, so roughly $66,000. Prepaid interest for the days left in the month is added on top and is not in either figure.
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