How to use the Closing Costs Calculator
- Enter the purchase price and your down payment percentage.
- Add discount points if you are buying the rate down; each point is 1% of the loan.
- Enter the local property tax rate and your annual insurance premium so prepaids are realistic.
- Read the total closing cost figure and, more importantly, the cash-to-close line.
- Compare the breakdown against your Loan Estimate — the lender fee section is where negotiation is possible.
How the calculation works
Closing costs split into three categories that behave very differently. Lender fees — origination, points, underwriting, appraisal — are negotiable and vary widely between lenders. Third-party and government charges — title insurance, recording, transfer taxes — are mostly fixed by local practice and statute. Prepaids and escrow deposits are not really costs at all: they are your own future tax and insurance bills collected early.
Total costs typically land between 2% and 5% of the purchase price, with the spread driven almost entirely by transfer taxes. Some states charge nothing; others take well over 1% of the price. This calculator uses mid-range national assumptions, so treat it as a planning estimate and let the Loan Estimate, which lenders must issue within three business days of application, be the authority.
The number that actually matters is cash to close, not closing costs. Buyers routinely budget the down payment and get surprised by another five figures on top. Seller concessions can cover part of it, lender credits can trade a higher rate for lower upfront cash, and both are worth pricing before you commit to a stretch offer.
Cash to close = down payment + origination + points + appraisal + title + recording + transfer tax + prepaid tax + prepaid insurance + prepaid interestSource: CFPB, 'What are closing costs?' and TRID Loan Estimate requirements, 12 CFR §1026.37; ALTA title fee schedules.
Worked example
A $400,000 purchase with 20% down and no discount points.
- Loan is $320,000; origination at 1% is $3,200 and the appraisal about $600.
- Title work of roughly $2,600 plus $250 recording.
- Transfer tax at 0.4% of price is $1,600.
- Prepaids: half a year of property tax at 1.1% is $2,200, plus $1,400 insurance and about $867 of escrowed interest.
Around $12,700 in closing costs, or 3.2% of the price — and $92,700 of total cash needed once the $80,000 down payment is added.
Frequently asked questions
Can closing costs be rolled into the loan?+
Sometimes on a refinance, rarely on a purchase. More often the lender offers a credit in exchange for a higher rate, which spreads the cost over the term.
Which fees are actually negotiable?+
Lender fees and the choice of title company. Government transfer taxes and recording fees are not.
Are discount points worth buying?+
Divide the point cost by the monthly saving to get a break-even in months. If you will keep the loan well past that, the points pay off.
Who pays closing costs, buyer or seller?+
Both pay their own set. Buyers cover lender and prepaid items; sellers typically cover commissions and, in many states, transfer taxes — all negotiable in the contract.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.