How much are mortgage closing costs?

Closing costs are the fees and prepaid items due at the closing table when you finalize a mortgage. The CFPB's mortgage closing costs guide estimates they typically total 2%–5% of the loan amount, though costs vary by loan size, lender, property location, and loan type. A Loan Estimate (LE), which lenders are required to provide within 3 business days of your application, lists all projected closing costs so you can compare offers.

Lender fees (some negotiable)

• Origination fee: Charged by the lender to process the loan — typically 0.5%–1% of the loan amount. May be called a processing fee, underwriting fee, or application fee.
• Discount points: Optional upfront payment to buy down the interest rate. One point = 1% of the loan amount and typically reduces the rate by 0.125%–0.25%. See also: should-i-buy-mortgage-points.
• Rate lock fee: Some lenders charge for extended rate locks — typically built into the rate on standard 30/45/60-day locks.

Third-party fees (less negotiable, but shop around)

• Appraisal: $400–$700+ depending on property type and location — required by the lender to confirm property value.
• Title search and title insurance: Combined $1,000–$3,000+ — protects the lender (and optionally you) against title defects. Required by lenders.
• Attorney fee: Required in some states (NY, MA, SC, GA, others) — $500–$1,500 typically.
• Inspection: $300–$600 — paid before closing; not always included in closing cost totals.

Prepaids and escrow deposits (not fees — they're your own money upfront)

• Prepaid homeowners insurance: Usually 12 months paid upfront at closing.
• Prepaid property taxes: 2–6 months of property tax deposited into escrow.
• Prepaid interest: Interest from closing date to end of month.

How to reduce closing costs

Shop multiple lenders — origination fees and rate offerings vary. You also have the right to shop for your own title insurance company in most states (the lender will designate a preferred vendor, but you can choose). Some lenders offer 'no-closing-cost' mortgages — these roll costs into the loan balance or rate rather than eliminating them. The CFPB's mortgage comparison tools and the RESPA-required Loan Estimate make side-by-side comparison straightforward.