# How much are my closing costs?

Adds up the closing costs of a home purchase in the sections of the Loan Estimate: lender charges, services, government fees, prepaid interest and insurance, and the escrow deposit, with the cash to close.

- Page: https://www.acalculator.org/finance/closing-cost-calculator
- JSON spec: https://www.acalculator.org/finance/closing-cost-calculator.json
- Version: 7e2092568a1d

## Default answer

Example with the default inputs (Home price $400,000.00, Down payment $80,000.00, Interest rate 6.5%, Origination charges 1%, Discount points 0, Appraisal, title, and other services $3,500.00, Recording fees $150.00, Transfer tax paid by you 0%, Seller and lender credits $0.00, Days of prepaid interest 15, Home insurance (per year) $1,500.00, Property tax (per year) 1.1%, Months of escrow deposit 3): Buying a $400,000.00 home with $80,000.00 down costs $10,679.79 at closing, so you need $90,679.79 to close.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| price | Home price | The price of the home. |
| down | Down payment | The cash you pay toward the price. The loan is the price minus this. |
| rate | Interest rate | The yearly mortgage rate, used for the interest paid at closing. |
| origination | Origination charges | The lender’s application, underwriting, and origination fees, as a percent of the loan. |
| points | Discount points | Points paid to lower the rate. One point is 1% of the loan. |
| services | Appraisal, title, and other services | Appraisal, credit report, title insurance, settlement, survey, and inspection fees. |
| recording | Recording fees | Government fees to record the deed and the mortgage. |
| transfer | Transfer tax paid by you | State and local transfer tax you pay, as a percent of the price. It varies by place. |
| credit | Seller and lender credits | Credits from the seller or lender that pay part of the closing costs. |
| days | Days of prepaid interest | Days from closing to the end of the month, whose interest is paid at closing. |
| insurance | Home insurance (per year) | The yearly homeowners insurance premium. The first year is paid at closing. |
| tax | Property tax (per year) | The yearly property tax as a percent of the price, used for the escrow deposit. |
| escrow | Months of escrow deposit | Months of property tax and insurance the lender collects at closing for the escrow account. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| total | Total closing costs | Lender charges, services, government fees, prepaids, and the escrow deposit. |
| share | Share of the price | Total closing costs as a percent of the home price. |
| cash | Cash to close | The down payment plus the closing costs, minus credits. |
| lender | Origination charges and points | Origination charges and discount points (Loan Estimate section A). |
| servicesCost | Services | Appraisal, title, and other services (sections B and C). |
| government | Taxes and government fees | Recording fees and transfer tax (section E). |
| prepaids | Prepaids | A year of home insurance and the interest to the end of the closing month (section F). |
| deposit | Initial escrow deposit | Months of property tax and insurance put in the escrow account (section G). |
| loan | Loan amount | The price minus the down payment. |

## Method

total = (origination % + points) × loan + services + recording + transfer % × price + a year of insurance + loan × rate ÷ 365 × days + (monthly tax + monthly insurance) × escrow months.

## Assumptions

- Every fee is an amount you enter; the defaults are examples, not quotes. Fees and transfer taxes vary by lender and place.
- Prepaid interest is the loan × the yearly rate ÷ 365 for each day; the first year of insurance is paid at closing.
- The escrow deposit is whole months of property tax and insurance; prepaid property tax and HOA transfer fees are not included.
- Credits pay closing costs only, so they lower the cash to close, never below the down payment.

## Worked examples

1. price = $400,000.00, down = $80,000.00, rate = 6.5%, origination = 1%, points = 0, services = $3,500.00, recording = $150.00, transfer = 0%, days = 15, insurance = $1,500.00, tax = 1.1%, escrow = 3, credit = $0.00 gives lender = $3,200.00, prepaids = $2,354.79, deposit = $1,475.00, total = $10,679.79, cash = $90,679.79, share = 2.669949%. Source: Regulation Z, 12 CFR 1026.37(f) and (g): the Loan Estimate’s closing cost sections.
2. price = $250,000.00, down = $8,750.00, rate = 7%, origination = 0.5%, points = 1, services = $2,800.00, recording = $200.00, transfer = 1%, days = 10, insurance = $1,200.00, tax = 1.5%, escrow = 2, credit = $5,000.00 gives lender = $3,618.75, government = $2,700.00, prepaids = $1,662.67, deposit = $825.00, total = $11,606.42, cash = $15,356.42.
3. price = $300,000.00, down = $300,000.00, rate = 6%, origination = 1%, points = 0, services = $2,000.00, recording = $100.00, transfer = 0%, days = 20, insurance = $1,200.00, tax = 1%, escrow = 0, credit = $0.00 gives loan = $0.00, lender = $0.00, prepaids = $1,200.00, total = $3,300.00, cash = $303,300.00.

## FAQ

### How much are closing costs?

Freddie Mac says closing costs are generally 2% to 5% of the purchase price. On a $400,000 home with the example fees here, they come to $10,679.79, or 2.67% of the price. Your Loan Estimate lists your lender's actual fees.

### What is included in closing costs?

The Loan Estimate groups them: origination charges and points from the lender; services such as the appraisal, credit report, title insurance, and settlement; taxes and government fees such as recording fees and transfer taxes; prepaids such as the first year of home insurance and interest to the end of the month; and the first deposit into your escrow account.

### What is prepaid interest?

Mortgage interest is paid a month late, so at closing you pay the interest from the closing day to the end of that month. It is the loan times the yearly rate ÷ 365 for each day: $320,000 at 6.5% is about $56.99 a day, so 15 days is $854.79. Closing near the end of the month lowers it.

### Why do I pay into escrow at closing?

If your lender pays your property tax and insurance for you, it holds a cushion in an escrow account. At closing it collects a few months of tax and insurance to start the account. That money is still yours; it pays your bills.

### Can the seller pay my closing costs?

Often yes, as a seller credit you negotiate in the purchase contract, up to limits your loan type sets. Lender credits in exchange for a higher rate are another way. Credits lower your cash to close.

### Who pays the transfer tax?

It depends on the state and local custom, and it is often negotiable. Some places charge none. Enter only the part you pay as the buyer.

## Sources

- Freddie Mac, What are closing costs and how much will I pay? (2% to 5% of the purchase price). https://myhome.freddiemac.com/blog/homebuying/what-are-closing-costs-and-how-much-will-i-pay
- Consumer Financial Protection Bureau, Loan Estimate explainer. https://www.consumerfinance.gov/owning-a-home/loan-estimate/
- Regulation Z, 12 CFR 1026.37(f) and (g): closing cost details on the Loan Estimate (origination charges, services, taxes and other government fees, prepaids, initial escrow payment). https://www.consumerfinance.gov/rules-policy/regulations/1026/37/