How the calculator works
Closing costs are the fees and prepaid amounts you pay to get your mortgage and transfer the home, on top of your down payment. This calculator uses the same lettered sections as page 2 of the federal Loan Estimate, so you can copy each line straight from the form your lender gives you. The dollar figures it starts with are examples, not averages.
| Section | What goes in it |
|---|---|
| A. Origination charges | Lender fees and discount points (1 point = 1% of the loan) |
| B. Services you cannot shop for | Third-party services the lender picks: appraisal, credit report, flood determination |
| C. Services you can shop for | Lender’s title insurance, settlement agent, survey, pest inspection |
| D. Total loan costs | A + B + C |
| E. Taxes and other government fees | Recording fees and any transfer taxes the buyer pays |
| F. Prepaids | Homeowners insurance premium, prepaid interest, property taxes due at closing |
| G. Initial escrow payment | Months of tax and insurance deposited into your escrow account |
| H. Other | Owner’s title policy (optional), HOA and other non-loan costs |
| J. Total closing costs | D + E + F + G + H, minus lender credits |
Prepaid interest covers the days from closing through the end of that month, because your first mortgage payment pays interest in arrears. It equals loan × rate ÷ 365 (some lenders use 360) × number of days. Cash to close is total closing costs plus your down payment, minus the earnest money you already paid and any seller credits.
Worked example
You buy a $450,000 home with 10% down ($45,000), so the loan is $405,000 at 6.5%. You close on the 16th of a 30-day month and already paid a $10,000 deposit.
- A. Origination: $1,200 in lender fees, no points.
- B. Appraisal $600, credit report $50, flood certificate $15 = $665.
- C. Lender's title policy $900 and settlement agent $800 = $1,700.
- E. Recording fees: $250 (no buyer transfer tax in this example).
- F. A year of homeowners insurance ($1,800) plus 15 days of prepaid interest. Daily interest is $405,000 × 6.5% ÷ 365 = $72.12, so prepaid interest is $1,082. Prepaids total $2,882.
- G. Three months of property tax at $450 and two months of insurance at $150 = $1,650.
- Total closing costs: about $8,347, or 1.85% of the price.
- Cash to close: $8,347 + $45,000 − $10,000 deposit = about $43,347.
Every number above is a placeholder. Your own Loan Estimate is what counts.
The rules that matter
- Escrow cushion. Under RESPA's Regulation X (12 CFR 1024.17), the extra cushion a servicer can hold in your escrow account can't be more than one-sixth of the year's estimated escrow payments. The deposit at closing can still be more than two months, because it also has to cover bills that come due before your escrow builds up.
- Closing Disclosure. Your lender must give you the final Closing Disclosure at least three business days before closing. Compare it line by line with the Loan Estimate and ask about any change.
- Points and credits. Points raise section A in exchange for a lower rate. Lender credits lower your closing costs in exchange for a higher rate. Test the trade with the mortgage points calculator.
Edge cases
- Transfer taxes vary. Who pays a transfer tax, and at what rate, depends on your state, city and contract. Enter 0 if the seller pays.
- FHA, VA and USDA fees. Upfront mortgage insurance premiums and VA or USDA guarantee fees charged at closing are listed in section B. If you roll the fee into your loan instead, leave it out here, because you won't pay it in cash at closing.
- Seller-paid costs. Seller credits have limits that depend on loan type and down payment. Check them with the seller concessions calculator.
- New York City adds mansion tax, mortgage recording tax and co-op fees. Use the NYC closing cost calculator and read NYC closing costs for buyers.
What to do next
Learn to read each line in How to read your Loan Estimate and Closing Disclosure, then see your full monthly cost with the mortgage calculator. Before you wire money, read how to protect your down payment from wire fraud.