The short answer: online guides commonly say buyers pay roughly 2%–5% of the price at closing, but that range mixes three different things: title, settlement, and government fees (about 1% of the price on average nationally, per LodeStar’s data on 2025 purchases); lender charges; and prepaid insurance, interest, and escrow. Your Loan Estimate locks many of those fees in place: some can’t rise at all, some can rise only 10% combined, and if your lender goes over the limit without a valid reason, you may be owed a refund.
| Layer | What’s in it | Typical size |
|---|---|---|
| 1. Title, settlement, government | Title policies, escrow fee, recording, transfer tax | About 1% on average (LodeStar, 2025 purchases) |
| 2. Lender charges | Origination, points, appraisal, credit report | Varies by lender and loan |
| 3. Prepaids and escrow | Interest, insurance, tax reserves | Varies by state and closing date |
Estimate your cash to close
Check your Closing Disclosure against your Loan Estimate
And there’s a rule most buyers never use: if certain fees rise without a valid reason, the lender has to give the difference back.
Cash-to-Close Estimator
Fill in what you know. Layer 2 and Layer 3 values are placeholders, so replace them with numbers from your Loan Estimate as soon as you have one.
Your estimate
How Much Are Closing Costs on a House in 2026?
Buyers should plan for a total that is commonly cited at roughly 2%–5% of the price, but the largest national dataset we found measures a narrower slice that averages about 1%.
The data point: LodeStar Software Solutions analyzed more than 620,000 purchase quotes from January 1 through December 31, 2025, and published the results on April 27, 2026. The national average came to $4,528, or 1.04% of the sales price, and the median to $3,492 (about 0.85%). Without recording fees and transfer taxes, the average was $2,993 and the median $2,923. The average sales price in the sample was $433,632.
That figure covers fees, recording charges, transfer taxes, settlement or escrow fees, and owner’s and lender’s title policies. It leaves out lender charges and prepaids and escrow. So it is one layer of your bill, not the whole bill, and the 2%–5% range is a rule of thumb that adds the other two layers back in. We haven’t found a published national average for the full total, so treat any single “average closing cost” with caution.
Buyer-agent compensation, if you pay it, is separate from all of this. See who pays the buyer-agent commission now.
Still before this step? Start with How Much House Can I Afford? and How to Get Preapproved for a Mortgage.
Why Every Site Gives a Different Number
Numbers differ because sites measure different layers, different years, and different states, and then label all of it “closing costs.”
- Different scope. LodeStar’s $4,528 leaves out lender charges and prepaids. A guide quoting 2%–5% usually adds them back.
- Different years. LodeStar’s first report (April 2025) put the national average at $4,661. The 2026 report, covering 2025 closings, says $4,528.
- Different states. Transfer taxes and recording charges vary enormously, and LodeStar found they drive most of the state-to-state spread. Delaware, New York, Vermont, Pennsylvania, and D.C. are its examples of high-transfer-tax markets.
| State | % of price | Main driver |
|---|---|---|
| Delaware (highest) | 3.06% | Transfer taxes make up a large share |
| Iowa | 0.56% | Low-cost states tend to have no or minimal transfer taxes |
| Colorado | 0.50% | Low-cost states tend to have no or minimal transfer taxes |
| South Dakota (lowest) | 0.39% | Low-cost states tend to have no or minimal transfer taxes |
| National average | 1.04% | Title, settlement, recording, and transfer taxes only |
What Closing Costs Include, Line by Line
Your Loan Estimate and Closing Disclosure sort every cost into lettered sections, and knowing the letters tells you which tolerance rule applies.
- A. Origination Charges: the lender’s own fees and any discount points. These are in the zero-tolerance group.
- B. Services You Cannot Shop For: items the lender requires and picks, such as the appraisal and credit report. Zero tolerance, whether or not the provider is affiliated with the lender.
- C. Services You Can Shop For: usually title and settlement services. Providers on the lender’s written list fall in the 10% group; providers you choose off the list have no cap.
- D. Total Loan Costs: A + B + C.
- E. Taxes and Other Government Fees: recording fees (10% group) and transfer taxes (zero tolerance).
- F. Prepaids: prepaid interest and homeowners insurance premium. No limit.
- G. Initial Escrow Payment at Closing: the starting balance of your tax and insurance reserve. No limit.
- H. Other: items like the owner’s title policy, HOA fees, and, when paid through closing, buyer-agent compensation.
- I and J: I totals E through H; J, Total Closing Costs, is D + I, less any lender credits.
Roughly, Layer 1 sits in parts of B, C, and E; Layer 2 in A and parts of B and C; Layer 3 in F and G. Insurance is often the biggest swing in Layer 3. If yours looks high, see why insurance companies are leaving some states.
Loan-specific fees get their own pages: the FHA upfront mortgage insurance premium is covered in FHA Loan Requirements, and the VA funding fee in VA Home Loans. Refinancing has a different cost structure; see Refinancing Your Mortgage.
Examples: $300K, $400K, and $500K Homes
On these hypothetical purchases with 10% down, total closing costs land around 3% of the price once all three layers are counted.
Hypothetical, for illustration only. Assumptions: 10% down; Layer 1 at LodeStar’s 1.04% national average; origination 0.5% of the loan, appraisal $650, credit report and other $400; 6.5% rate, closing on the 15th (16 days of prepaid interest); insurance 0.6% of price and property tax 1.2% of price per year; first-year insurance paid at closing; 3 months of escrow reserves. No seller or lender credits, no buyer-paid agent compensation.
| Item | $300,000 | $400,000 | $500,000 |
|---|---|---|---|
| Layer 1: title, settlement, government | $3,120 | $4,160 | $5,200 |
| Layer 2: lender charges | $2,400 | $2,850 | $3,300 |
| Layer 3: prepaids and escrow | $3,919 | $5,226 | $6,532 |
| Total closing costs | $9,439 (3.15%) | $12,236 (3.06%) | $15,032 (3.01%) |
| Down payment (10%) | $30,000 | $40,000 | $50,000 |
| Estimated cash to close | $39,439 | $52,236 | $65,032 |
Closing Costs vs. Down Payment vs. Cash to Close
Closing costs are what you pay to complete the purchase beyond the price itself; cash to close is the single wire or check you actually bring, after your down payment, credits, and earnest money are counted.
| Item | In closing costs? | In cash to close? |
|---|---|---|
| Down payment | No | Yes |
| Lender charges (origination, points, appraisal, credit report) | Yes | Yes |
| Title, settlement, recording, transfer taxes | Yes | Yes |
| Prepaids and initial escrow deposit | Yes, on the Loan Estimate form (LodeStar’s figure leaves them out) | Yes |
| Buyer-paid agent compensation paid at closing | Shows in Section H when paid through closing | Yes |
| Seller credit | Reduces what you pay | Subtracted |
| Lender credit | Reduces total closing costs | Subtracted |
| Earnest money already paid | No | Credited, so you owe less |
| FHA upfront MIP, VA funding fee (if financed) | Disclosed, but added to the loan | Not paid in cash if financed |
| Monthly PMI | No. See How to Remove PMI | No |
Assistance programs change this math, and not always in your favor. See Down Payment Assistance Isn’t Free Money. And the escrow deposit is the reason your first payment can differ from the quote; see Why Did My Mortgage Payment Go Up?
Can Closing Costs Go Up After Your Loan Estimate?
Yes, some can, but the CFPB sorts them into three categories: some can’t increase at all, some can increase by up to 10% combined, and some can increase by any amount.
We use three tiers throughout this guide:
| Category | Examples | Allowed increase |
|---|---|---|
| Zero tolerance | Fees paid to the lender, mortgage broker, or an affiliate of either; required services you weren’t allowed to shop for (unaffiliated provider); transfer taxes | None, unless there is a valid changed circumstance |
| 10% aggregate | Recording fees; required services from the lender’s written provider list | The total of these fees can’t rise more than 10% above the Loan Estimate total, unless there is a valid changed circumstance |
| No limit | Prepaid interest, insurance premiums, initial escrow deposits; required services you shopped for off the list; optional services | Can change by any amount |
Two nuances that trip people up
An affiliate on the lender’s list is zero tolerance. If a provider on the lender’s written list is affiliated with the lender, its fee is treated like the lender’s own fees: no increase allowed. The 10% group is for unaffiliated providers on the list.
The 10% is a combined total, not per fee. Hypothetical: your Loan Estimate shows a $200 recording fee and a $1,800 title charge from the lender’s list. The group total is $2,000, so the limit is $2,200. A Closing Disclosure total of $2,150 is WITHIN LIMITS. A total of $2,350 is $150 over: ASK WHY, and POSSIBLE REFUND if no valid reason exists.
Zero-tolerance fees are checked one by one. Hypothetical: origination is $1,800 on the Loan Estimate and $2,100 on the Closing Disclosure. That is $300 over with no cushion. A decrease in some other zero-tolerance fee doesn’t offset it.
Interest rate. If your rate isn’t locked, it can change at any time. A locked rate can change if your application information changes or you miss the lock deadline.
Compare against the right document. Measure against your most recent Loan Estimate, not the first one you received. A valid revised Loan Estimate resets the baseline.
When Your Lender Is Allowed to Raise Fees
A lender may raise zero- and 10%-tolerance fees only when something relevant to the loan has really changed, which Regulation Z calls a changed circumstance.
The CFPB’s examples include:
- You switch to a different loan type, or change your down payment.
- The appraisal comes in higher or lower than expected.
- New credit, or a missed payment, changes your credit.
- Income the lender couldn’t document turns out different from what you reported.
- You request a rate lock after the Loan Estimate was issued.
The regulation also covers other situations, including information the lender relied on that turned out inaccurate, or new information it didn’t have. When a valid change occurs, the lender should send a revised Loan Estimate reflecting it, generally within three business days of learning of it. Otherwise, any excess over the limits must be refunded.
So when a fee is up, don’t ask “can you do that?” Ask: “Which changed circumstance applies to this fee, what date did you learn of it, and where is the revised Loan Estimate?” Letter 1 below puts that in writing.
Your Closing Disclosure Is Higher — What to Do
Compare it line by line to your most recent Loan Estimate, ask in writing about every fee over its limit, and, if no valid reason applies, ask the lender to cure it.
The lender cures a tolerance violation by refunding the excess and delivering a corrected Closing Disclosure no later than 60 days after consummation (12 CFR § 1026.19(f)(2)(v)). The refund isn’t automatic from your side, so ask, in writing, and keep the dates. If you aren’t satisfied with the explanation, you can also submit a complaint to the CFPB, or compare other lenders if closing is still ahead.
Loan Estimate vs. Closing Disclosure Checker
Enter up to eight fees. Use the amounts from your most recent Loan Estimate and your Closing Disclosure. If a provider on the lender’s list is affiliated with the lender, choose “Lender, broker, or affiliate fee.”
Fee 1
Fee 2
Fee 3
Fee 4
Fee 5
Fee 6
Fee 7
Fee 8
Your result
The 3-Business-Day Closing Disclosure Rule
Your lender must make sure you receive the Closing Disclosure at least three business days before consummation, which is the moment you become legally obligated on the loan.
- What counts as a business day. For this rule, every calendar day except Sundays and federal legal public holidays counts, so Saturdays count.
- Example. Hand-delivered on Monday, with no holiday in between, you could close as early as Thursday.
- Mail and email. If it isn’t handed to you, you’re presumed to receive it three business days after it is mailed or sent, unless the lender can document earlier receipt. That can mean roughly six business days from sending to closing.
What restarts the three-day wait. A corrected Closing Disclosure requires a new three-business-day wait only if (1) the APR becomes inaccurate, (2) the loan product changes, or (3) a prepayment penalty is added.
What doesn’t. Other changes, such as a fee that shifts, can generally be corrected without a new waiting period, as long as you get the corrected disclosure at or before closing. A fee change that pushes a tolerance fee over its limit still has to be cured by the lender; it just doesn’t restart the clock by itself.
Who Pays Closing Costs: Buyer, Seller, or Lender?
By default the buyer pays, but the seller can pay part through a negotiated concession, and the lender can pay part through a credit, usually in exchange for a higher interest rate.
- Buyer: pays everything not covered by someone else, from your own funds.
- Seller: agrees in the purchase contract to credit you a dollar amount or percentage, subject to your loan program’s cap. See the next section.
- Lender: a lender credit reduces closing costs, typically because you accept a higher rate. Under Fannie Mae’s guide, a lender credit that comes from premium pricing isn’t treated as a seller or other interested-party contribution.
- Others: builders, assistance programs, and gifts can also help, each with its own rules.
Seller Concessions: How Much Can the Seller Pay?
It depends on your loan program: conventional caps run 3%, 6%, or 9% by loan-to-value (2% for investment property), FHA and USDA allow 6%, and VA caps concessions at 4% apart from normal closing costs.
| Loan type | Limit | Note |
|---|---|---|
| Conventional, primary or second home | 3% if LTV is over 90%; 6% if LTV is over 75% and up to 90%; 9% if LTV is 75% or less | Fannie Mae and Freddie Mac. The cap is measured on the lower of the sales price or appraised value. Can’t be used for the down payment or reserves, and can’t exceed your actual closing costs. Amounts above the cap are treated as sales concessions and reduce the price used for the loan. |
| Conventional, investment property | 2% | Same rule at every LTV. |
| FHA | 6% of the sales price | For eligible costs, not the borrower’s minimum required investment. See FHA Loan Requirements. |
| VA | 4% in concessions, separate from the seller paying ordinary closing costs | Items such as paying off a buyer’s debts count toward the 4%; ask your lender to classify each item. See VA Home Loans. |
| USDA | 6% of the sales price | Must be used for allowable costs; can’t create cash back. |
Hypothetical: on a $400,000 conventional purchase with 10% down, LTV is 90%, so the cap is 6%, or $24,000. With 5% down, LTV is 95% and the cap is 3%, or $12,000. A credit can only cover your actual eligible costs, so a larger credit than your costs doesn’t turn into cash.
The seller credit and the lender credit both show on your Closing Disclosure. Confirm they appear before you sign.
Who Pays the Buyer-Agent Commission Now?
It’s negotiable: since August 17, 2024, offers of compensation can no longer appear on MLS listings, so the buyer, the seller, or both can agree who pays, and it should be in writing before you tour.
- What changed (NAR). Offers of compensation can’t be made on the MLS, compensation stays negotiable, and covered MLS participants must have a written agreement with the buyer before touring.
- Seller can still pay. A seller concession can be used toward buyer-broker fees, subject to lender and loan-program rules. Fannie Mae and Freddie Mac clarified in April 2024 that seller-paid buyer-agent commissions that follow local custom aren’t counted toward their concession limits. FHA’s handbook likewise says commissions customarily paid by the seller aren’t interested party contributions.
- Buyer can pay too. VA Circular 26-24-14 has let veterans pay reasonable and customary buyer-broker charges since August 2024. The lender collects the buyer-broker agreement, and the charge is recorded in Section H of the Closing Disclosure. Sources disagree on how a seller-paid VA commission is counted against the 4%, so ask your lender to confirm in writing.
- Financing it. Whether a buyer-paid commission can be financed depends on lender and agency rules, not federal law. A purchase loan is sized on the price, and VA doesn’t allow the commission to be financed, so plan on paying it from your own funds or a seller credit unless your lender confirms otherwise.
There’s no standard rate. Ask your agent for the number in writing and see where it lands: it may appear on your Closing Disclosure in Section H, outside the LodeStar figures above.
How to Lower Your Closing Costs
The biggest levers are comparing lenders, comparing title and settlement quotes, choosing between credits and rate, timing the closing date, and negotiating seller credits.
- Shop lenders. Request Loan Estimates from several lenders and compare section by section. Shopping can trigger a flood of calls; see Mortgage Spam Calls and Trigger Leads. Credit-scoring models generally treat mortgage inquiries within a short window as one.
- Compare title and settlement providers. These are services you can shop for. Ask for itemized quotes (Letter 3). Remember that choosing off the lender’s list removes the cap on those fees.
- Weigh lender credits against rate. A credit lowers cash to close but usually raises the rate. Divide the credit by the monthly payment difference to see how many months it takes for the higher rate to cost more than the credit.
- Pick your closing date. Closing later in the month means fewer days of prepaid interest at the table. That lowers your cash to close.
- Negotiate seller credits. Use Letter 5, within your loan’s cap.
- Look at assistance programs. Some help with closing costs, but check the terms first: Down Payment Assistance Isn’t Free Money.
- Ask for a fee reduction. A competing Loan Estimate gives you leverage (Letter 4).
We don’t recommend specific lenders, title companies, or agents. Compare actual quotes.
Letters and Scripts
Each letter below is copy-ready. Replace every [placeholder], and keep a record of what you send and when.
Letter 1: Tolerance cure request
Letter 2: Closing Disclosure questions
Letter 3: Title and settlement quote request
Letter 4: Lender credit or fee reduction request
Letter 5: Seller credit request (for your agent)
Closing-Day Checklist
Use the days between receiving your Closing Disclosure and signing to check each of these.
- Confirm you received the Closing Disclosure at least three business days before closing.
- Compare every fee with your most recent Loan Estimate.
- Check each over-limit fee against its category: zero, 10%, or no limit.
- Ask in writing about any changed circumstance.
- Confirm your rate lock and its expiration date.
- Check that the seller credit and any lender credit appear.
- Verify the cash-to-close figure and your earnest money credit.
- Confirm homeowners insurance is in place and its premium matches.
- Verify wire instructions by phone, using a number you look up independently.
- Keep copies of the Loan Estimate, Closing Disclosure, and any letters.
FAQ
How much are closing costs on a house in 2026?
Many guides cite roughly 2%–5% of the price. The best-measured piece, LodeStar’s data on 2025 purchases, covers title, settlement, recording, and transfer taxes and averages 1.04%; lender charges and prepaids come on top.
What’s the average closing cost for a buyer?
LodeStar’s 2025 data shows a national average of $4,528 and a median of $3,492, covering fees, recording, transfer taxes, settlement or escrow, and title policies. It excludes lender charges and prepaids.
How much are closing costs on a $300,000 house?
In our hypothetical example, about $9,400 (around 3.1%) with 10% down. Your number will differ by state, lender, and loan. See the examples.
How much are closing costs on a $400,000 house?
In our hypothetical example, about $12,200 (around 3.06%) with 10% down. Try the estimator with your own numbers.
Why do closing cost estimates vary so much?
Sources measure different layers, different years, and different states. See why every site gives a different number.
Are closing costs separate from the down payment?
Yes. Both are due at closing, and together with credits and earnest money they make up your cash to close.
Are prepaids part of closing costs?
On the Loan Estimate and Closing Disclosure, yes: prepaids and the initial escrow deposit roll into Total Closing Costs. Some sources, including LodeStar’s average, leave them out.
What’s the difference between closing costs and cash to close?
Cash to close = down payment + closing costs − seller credit − lender credit − earnest money already paid.
Can closing costs change after the Loan Estimate?
Some can. Zero-tolerance fees can’t rise without a valid changed circumstance, the 10% group can rise 10% combined, and prepaids, escrow, and off-list or optional services have no limit.
Which closing costs can’t increase?
Fees paid to the lender, mortgage broker, or their affiliates; required services you weren’t allowed to shop for (unaffiliated); and transfer taxes. A valid changed circumstance can change that.
What is the 10% tolerance, and is it per fee?
It applies to the total of recording fees and required services from the lender’s list. The combined total can’t rise more than 10% above the Loan Estimate total without a valid changed circumstance.
What counts as a changed circumstance?
CFPB examples include a different loan type or down payment, an appraisal that comes in higher or lower than expected, new credit or a missed payment that changes your credit, and income the lender couldn’t document.
What if my Closing Disclosure is higher than my Loan Estimate?
Compare it to your most recent Loan Estimate, ask in writing which changed circumstance applies, and use the checker.
Can I get a refund if fees exceed the limits?
You may be entitled to one. If fees exceed the limits without a valid reason, the lender cures it by refunding the excess and sending a corrected Closing Disclosure within 60 days after consummation. Ask in writing; see Letter 1.
When should I get my Closing Disclosure?
At least three business days before closing. If it’s mailed or emailed without proof of receipt, it’s presumed received three business days after sending.
Does a change to the Closing Disclosure delay closing?
Only if the APR becomes inaccurate, the loan product changes, or a prepayment penalty is added. Other corrections generally don’t restart the three-day wait.
Can the seller pay my closing costs?
Yes, if it’s negotiated in the contract and within your loan program’s cap. It can’t cover your down payment.
How much can a seller contribute on FHA, VA, or conventional loans?
Conventional: 3%, 6%, or 9% by LTV (2% for investment property). FHA: 6%. VA: 4% in concessions, apart from normal closing costs. See the table.
Who pays the buyer-agent commission now?
It’s negotiable between you, your agent, and the seller, and it should be in writing before you tour. See the details.
Can closing costs be rolled into the mortgage?
Generally not as a line item on a purchase. Some program fees, like the FHA upfront mortgage insurance premium, the VA funding fee, and the USDA guarantee fee, are commonly financed. A lender credit can offset costs in exchange for a higher rate. Refinances more often allow rolling costs into the balance.
What’s a no-closing-cost mortgage?
A loan where a lender credit covers the costs, usually in exchange for a higher interest rate. The costs don’t disappear; you pay them over time through the rate.
Are closing costs tax-deductible?
Some may be. Points may be deductible if IRS conditions are met (IRS Publication 936), and certain real estate taxes can be deductible. Most other fees, like appraisal and title, aren’t deductible but may be added to your home’s basis (IRS Publication 530). Ask a tax professional.
Sources
- CFPB: Can my final mortgage costs increase from what was on my Loan Estimate?
- Regulation Z, 12 CFR § 1026.19(e)–(f)
- LodeStar Software Solutions, Purchase Mortgage Closing Cost Data Report (Apr. 27, 2026)
- Fannie Mae, Selling Guide B3-4.1-02, and Selling Notice of Apr. 15, 2024
- Freddie Mac, Guide Section 5501.6
- HUD Handbook 4000.1 (FHA); VA Lenders Handbook and Circular 26-24-14; USDA guaranteed loan guidance
- IRS, Publication 530 and Publication 936
Last updated:
This guide is educational only and is not financial, tax, or legal advice. Fees vary by state, lender, and loan program, and rules change. Examples are hypothetical. Data sources: LodeStar (released Apr. 27, 2026, covering 2025 purchases); CFPB and Regulation Z; Fannie Mae, Freddie Mac, FHA, VA, and USDA guidance, checked Oct. 5, 2026. Confirm all figures with your lender, and consult a qualified professional about your situation.
Daniel Hayes is the founder and sole researcher at AdvoraHQ. He covers U.S. personal finance, insurance, and consumer law — working directly from IRS publications, federal and state statutes, court opinions, and SEC filings rather than secondary summaries. His focus is the gap between what readers think they know and what the source documents actually say. Daniel is not a licensed attorney, CPA, or financial advisor; his articles are educational and not personalized advice. Reach him at Daniel.Hayes@advorahq.com.
